Information and Organization: A New Perspective on the Theory of the FirmThis book offers a vision of the economy as a system of structured information flow. The structuring is effected by institutions, and in particular by firms, which specialize in processing the information needed to allocate resources properly. Firms are the institutional embodiment of the visions of individual entrepreneurs who believe that they have found a better way of allocating resources. Entrepreneurial vision is only a partial vision, however, in the sense that it does not encompass the entire economy, but only a subset of it. Free market economies encourage the exploitation of such partial visions because they encourage intermediation—-it is by mediating between potential buyers and potential sellers that entrepreneurial visions are realized. A legal framework of private property, coupled with a moral framework to control the incidence of cheating, allows very sophisticated structures of information processing to emerge. These structures effect an elaborate division of labour in the dimensions of information and control. Each firm is a small component of the overall structure of information flow. This structure is highly flexible and evolves continuously as circumstances change. Efficient adaptation is encouraged by rewarding entrepreneurs who create new firms to be slotted into the existing structure. This vision has evolved over the last fifteen years, during which the author has researched a variety of topics connected with the theory of the firm——entrepreneurship, business culture, multinational enterprise, joint ventures and the like. In each of these areas he has identified the ways in which the orthodox theory of the firm needs to be modified in order to make it work properly. This book represents a major intellectual synthesis of that work. |
Contents
| 3 | |
The Process of Coordination | 35 |
between neighbours | 41 |
of propagation varies according to the size of the fixed | 48 |
The Nature of the Firm | 76 |
Business Networks | 117 |
Imitation and Instability | 146 |
Factual and Moral | 172 |
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Common terms and phrases
activity advantage asset bounded rationality business networks buyer capital Casson Chapter collect colonial commodity communication comparative advantage competence competition concept concerned consumer contract coordination created decisions demand developed direct investment division of labour economic economies of scale effected elite employees entrepreneur environment equity example exploitation export finance foreign direct investment free-standing company free-standing firm headquarters hierarchy high-trust illustrated in Fig imitation important indicated individual industry information costs information flow innovation integration intermediator inventory investor involved kind m₁ marginal rates market-making merchant Merthyr Merthyr Tydfil monitoring moral multinational negotiations opportunity organization owner ownership particular port possible problem procedures production rate of substitution rational relevant retailer risk role seller ship shocks situation social groups sources specific strategy sunk costs supply synthesis theory tion transaction costs transitory factor trust types vertical integration volatility Walrasian auctioneer
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Page 299 - Come cambia un distretto industriale: strategic di riaggiustamento e tecnologie informatiche nell'industria tessile di Prato', Economia e politico industriale, 70: 121-52.