Reassessing the fundamentals and beyond : Ronald Coase, the transaction cost and resource-based theories of the firm and the institutional structure of production
By: MADHOK, Anoop
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Material type: 
ArticlePublisher: 2002Subject(s): Transaction Costs | Resource-Based Theory | Governance | Interfirm Cooperation | Firm BoundariesStrategic Management Journal 23, 6, p. 535-550Abstract: In this paper, three points are argued. The first is that Ronald Coase, best know as the forefather of transaction cost theory, foresaw many of the critical questions that proponents of the resource-based view are concerned with today. The second is that resource-based theory plays a potentially much more critical role in economic theory and in explaining the institutional structure of complete understanding of the organization of economic activity requires a greater sensitivity to the interdependence of production and exchange relations. The arguments presented in this paper highlight important, but relatively ignored, elements in Coase's work that inform strategy research. More importantly, this paper makes te case for a triangular alignment between the triumvirate of governance structure, transaction, and resource attributes and demonstrates how the identity and strategy of a particular firm influences how its resources interact with the transaction and how the firm chooses to govern it. The general argument is then applied to the context of interfirm collaborative relations, where the key focus is broadened from just cost to also include skills/knowledge and the interdependence between cot and skill with respect to firm boundaries, both in terms of choice and nature. Such a broadnening of focus enables us to additionally examine the transacting process as productive endeavor, which underpins the co-evolution of the competencies of partner firms
| Item type | Current location | Collection | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Periódico | Biblioteca Graciliano Ramos | Periódico | Not for loan |
In this paper, three points are argued. The first is that Ronald Coase, best know as the forefather of transaction cost theory, foresaw many of the critical questions that proponents of the resource-based view are concerned with today. The second is that resource-based theory plays a potentially much more critical role in economic theory and in explaining the institutional structure of complete understanding of the organization of economic activity requires a greater sensitivity to the interdependence of production and exchange relations. The arguments presented in this paper highlight important, but relatively ignored, elements in Coase's work that inform strategy research. More importantly, this paper makes te case for a triangular alignment between the triumvirate of governance structure, transaction, and resource attributes and demonstrates how the identity and strategy of a particular firm influences how its resources interact with the transaction and how the firm chooses to govern it. The general argument is then applied to the context of interfirm collaborative relations, where the key focus is broadened from just cost to also include skills/knowledge and the interdependence between cot and skill with respect to firm boundaries, both in terms of choice and nature. Such a broadnening of focus enables us to additionally examine the transacting process as productive endeavor, which underpins the co-evolution of the competencies of partner firms
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