An Aspirational Community Theory of the Firm

    Research output: Working paperResearch

    8 Downloads (Pure)

    Abstract

    All of the three major theories of the firm, i.e., the transaction cost theory, knowledge-based theory and the entrepreneurship theory, offer some insightful analyses of the nature of the firm. However, they all have limitations and weaknesses in answering the fundamental question of the existence of the firm. In addition, they are all partial due to their particular focus on the multifaceted phenomenon of the firm. We argue that it is necessary and sufficient to develop a comprehensive yet integrative theory of the firm that combines the three competing yet complementary logics. Toward this end, we propose an aspirational community theory of the firm (ACT) as a candidate theory by conceptualizing the firm as an aspirational community, the core of which is a group of like-minded people sharing similar or same aspiration/vision. To explain the existence of the firm, we make a distinction between contractual labor and aspirational labor, the former being defined as services provided by a laborer in fulfillment of a contract while the latter as services provided by a laborer in pursuit of an aspiration; and argue that firms exist because while the market may be effective and efficient for allocating contractual labor it is less effective and efficient than the firms for allocating aspirational labor.
    Original languageEnglish
    PublisherDepartment of International Economics and Management, Copenhagen Business School
    Number of pages30
    Publication statusPublished - 2011

    Keywords

    • Theory of the Firm
    • Transaction Cost
    • Knowledge
    • Entrepreneur
    • Aspirational Community

    Cite this

    Li, X. (2011). An Aspirational Community Theory of the Firm. Department of International Economics and Management, Copenhagen Business School.
    Li, Xin. / An Aspirational Community Theory of the Firm. Department of International Economics and Management, Copenhagen Business School, 2011.
    @techreport{e71a0513cc7642289fb892f3f52299f6,
    title = "An Aspirational Community Theory of the Firm",
    abstract = "All of the three major theories of the firm, i.e., the transaction cost theory, knowledge-based theory and the entrepreneurship theory, offer some insightful analyses of the nature of the firm. However, they all have limitations and weaknesses in answering the fundamental question of the existence of the firm. In addition, they are all partial due to their particular focus on the multifaceted phenomenon of the firm. We argue that it is necessary and sufficient to develop a comprehensive yet integrative theory of the firm that combines the three competing yet complementary logics. Toward this end, we propose an aspirational community theory of the firm (ACT) as a candidate theory by conceptualizing the firm as an aspirational community, the core of which is a group of like-minded people sharing similar or same aspiration/vision. To explain the existence of the firm, we make a distinction between contractual labor and aspirational labor, the former being defined as services provided by a laborer in fulfillment of a contract while the latter as services provided by a laborer in pursuit of an aspiration; and argue that firms exist because while the market may be effective and efficient for allocating contractual labor it is less effective and efficient than the firms for allocating aspirational labor.",
    keywords = "Theory of the Firm, Transaction Cost, Knowledge, Entrepreneur, Aspirational Community, Theory of the Firm, Transaction Cost, Knowledge, Entrepreneur, Aspirational CCommunity",
    author = "Xin Li",
    year = "2011",
    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 2011 'An Aspirational Community Theory of the Firm' Department of International Economics and Management, Copenhagen Business School.

    An Aspirational Community Theory of the Firm. / Li, Xin.

    Department of International Economics and Management, Copenhagen Business School, 2011.

    Research output: Working paperResearch

    TY - UNPB

    T1 - An Aspirational Community Theory of the Firm

    AU - Li, Xin

    PY - 2011

    Y1 - 2011

    N2 - All of the three major theories of the firm, i.e., the transaction cost theory, knowledge-based theory and the entrepreneurship theory, offer some insightful analyses of the nature of the firm. However, they all have limitations and weaknesses in answering the fundamental question of the existence of the firm. In addition, they are all partial due to their particular focus on the multifaceted phenomenon of the firm. We argue that it is necessary and sufficient to develop a comprehensive yet integrative theory of the firm that combines the three competing yet complementary logics. Toward this end, we propose an aspirational community theory of the firm (ACT) as a candidate theory by conceptualizing the firm as an aspirational community, the core of which is a group of like-minded people sharing similar or same aspiration/vision. To explain the existence of the firm, we make a distinction between contractual labor and aspirational labor, the former being defined as services provided by a laborer in fulfillment of a contract while the latter as services provided by a laborer in pursuit of an aspiration; and argue that firms exist because while the market may be effective and efficient for allocating contractual labor it is less effective and efficient than the firms for allocating aspirational labor.

    AB - All of the three major theories of the firm, i.e., the transaction cost theory, knowledge-based theory and the entrepreneurship theory, offer some insightful analyses of the nature of the firm. However, they all have limitations and weaknesses in answering the fundamental question of the existence of the firm. In addition, they are all partial due to their particular focus on the multifaceted phenomenon of the firm. We argue that it is necessary and sufficient to develop a comprehensive yet integrative theory of the firm that combines the three competing yet complementary logics. Toward this end, we propose an aspirational community theory of the firm (ACT) as a candidate theory by conceptualizing the firm as an aspirational community, the core of which is a group of like-minded people sharing similar or same aspiration/vision. To explain the existence of the firm, we make a distinction between contractual labor and aspirational labor, the former being defined as services provided by a laborer in fulfillment of a contract while the latter as services provided by a laborer in pursuit of an aspiration; and argue that firms exist because while the market may be effective and efficient for allocating contractual labor it is less effective and efficient than the firms for allocating aspirational labor.

    KW - Theory of the Firm

    KW - Transaction Cost

    KW - Knowledge

    KW - Entrepreneur

    KW - Aspirational Community

    KW - Theory of the Firm

    KW - Transaction Cost

    KW - Knowledge

    KW - Entrepreneur

    KW - Aspirational CCommunity

    M3 - Working paper

    BT - An Aspirational Community Theory of the Firm

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

    ER -

    Li X. An Aspirational Community Theory of the Firm. Department of International Economics and Management, Copenhagen Business School. 2011.