Firms, Organizations and Contracts: A Reader in Industrial Organization

By Peter J. Buckley; Jonathan Michie | Go to book overview

In companies whose distinctive competence is best served by traditional organization structures, there may still be pressure to demonstrate more flexible, innovative behavior. The network model suggests that these companies can be more innovative by setting up special units focused on innovation in which brokers bring resources together and later transfer results to the larger operating system. A number of mechanisms for supplementing existing structures are available, including internal venturing or 'intrapreneurship', external coventuring, idea markets, and innovator roles such as idea champions, sponsors, and orchestrators. Taken together, these structures, processes, and interpersonal roles comprise an innovating organization that operates parallel to the main system. 11 Developed and used in companies such as IBM, Texas Instruments, Minnesota Mining and Manufacturing, and others, these innovating mechanisms can be employed by more traditional firms to keep pace with developments in their industries. Some companies may choose to internally generate more ideas and innovations, while others may rely on external coventuring schemes to create needed innovations. In either case, advances made by the innovating system are integrated into the larger organization only after their utility has been clearly demonstrated.


6. Conclusions

Current 'merger mania' notwithstanding, it seems likely that the eighties and nineties will be known as decades of largescale disaggregation and redeployment of resources in the United States and of a reshaping of strategic roles across the world economy. By the turn of the century, we expect US firms to be playing producer roles primarily in high-technology goods and service industries (agriculture may be regarded as a high-tech industry). These industries are characterized by sophisticated products and delivery systems for which the United States has a worldwide competitive advantage. In more mature industries, especially those containing a large proportion of commodity products or services, we would expect US firms to play primarily designer and distributor roles, with production limited to special-needs products and prototype designs to be licensed for production abroad. Of course, the United States will play a major marketer/distributor role in most industries throughout this period.

These shifting alignments will create both competitive challenges and opportunities for managers and policymakers. The greatest barrier to suc

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Firms, Organizations and Contracts: A Reader in Industrial Organization
Table of contents

Table of contents

  • Title Page iii
  • Preface and Acknowledgements v
  • Acknowledgements vi
  • Contents viii
  • List of Contributors xi
  • Foreword xiii
  • Introduction and Overview 1
  • Notes 18
  • References 20
  • I. THEORY OF THE FIRM 21
  • 1: The Equilibrium of the Firm 23
  • 2: The Nature of the Firm 40
  • 3: The Organization of Industry 59
  • 4: Production, Information Costs, and Economic Organization 75
  • Summary 95
  • Notes 96
  • References 102
  • 5: Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure 103
  • Conclusions 151
  • Notes 151
  • References 163
  • 6: Transaction-Cost Economics: The Governance of Contractual Relations 168
  • Conclusion 192
  • 7: An Economist's Perspective on the Theory of the Firm 199
  • Conclusion 212
  • Notes 212
  • II. MARKETS AND INDUSTRIAL ORGANIZATION 219
  • 8: Corporate Culture and Economic Theory 221
  • Introduction 221
  • Conclusion 261
  • Appendix 262
  • Appendix 271
  • Appendix 273
  • References 274
  • 9: Co-operative Agreements and the Organization of Industry 276
  • References 292
  • 10: Interpenetration of Organization and Market: Japan's Firm and Market in Comparison with the US 293
  • Conclusion 317
  • References 319
  • 11: Vertical Quasi-Integration 320
  • Conclusions 336
  • Notes 337
  • 12: Non-Contractual Relations In Business: A Preliminary Study 339
  • 13: Goodwill and the Spirit of Market Capitalism 359
  • III. JOINT VENTURES, NETWORKS, AND] CLANS 383
  • III. JOINT VENTURES, NETWORKS, AND] CLANS 385
  • References 407
  • 15: Joint Ventures 410
  • Conclusion 427
  • References 428
  • 16: Organizations: New Concepts for New Forms 429
  • Conclusion 440
  • Notes 441
  • 17: Markets, Bureaucracies, and Clans 442
  • References 456
  • Notes 459
  • References 473
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