Oliver E. Williamson

Bio: Oliver E. Williamson is an academic researcher from University of California, Berkeley. The author has contributed to research in topics: Transaction cost & Corporate governance. The author has an hindex of 80, co-authored 191 publications receiving 117766 citations. Previous affiliations of Oliver E. Williamson include University of California & University of Pennsylvania.

Economic Organization: The Case For Candor

Abstract: The article reports on transitional cost economics (TCE) and opportunism in business. The author focuses on discussing the economic theory of industrial organization. It is suggested that research related to self-interest and cognitive styles is especially useful when considering aspects of organizational behavior. It is further suggested that TCE and industrial efficiency are connected to one another. The author discusses the strengths and weaknesses present in many professional contracts. Prediction methods are also examined.

Organization Form, Residual Claimants, and Corporate Control

Abstract: EUGENE FAMA and Michael Jensen's treatment of the "Separation of Ownership and Control" is both insightful and informative. It deepens our understanding of corporate control, and the analysis of residual claimants usefully extends the economics of internal organization to include partnerships, mutuals, nonprofits, and the like. The basic argument is this: specialized governance structures arise in response to the efficiency needs of each type of organization. This is an important argument and one with which I broadly concur. They couple this, however, with a strong suggestion that these structures have reached a high degree of refinement-on which account there is not now, if indeed there ever has been, an organization control problem with which scholars and others are legitimately concerned. On this point I have grave doubts. My discussion of the paper addresses three issues: What is the relation, if any, of the hierarchical organization of the firm to economic performance? What relation, if any, does residual claimant status have to the composition and character of the board of directors? And is there now or has there ever been a corporate control problem? I deal with each of these issues in order.

Comparative Economic Organization—Within and Between Countries

Abstract: This paper explores the implications of going beyond transaction cost theory's implicit focus on domestic investors to include multinational actors. As developed herein, the discriminating alignment between the level of hazards (contractual and/or political) and the mode of governance carries over. In the open-economy context, such an alignment reflects the hazards that arise from the nature of the transaction and those that arise from the nature of the political and regulatory environment.

Chapter 3 Transaction cost economics

Abstract: Publisher Summary This chapter discusses the operationalization of transaction cost economics. Vertical integration, an understanding of which serves as a paradigm for helping to unpack the puzzles of complex economic organization more generally, is described in the chapter. Some empirical tests of the transaction cost hypotheses are summarized in the chapter. Transaction cost economics adopts a contractual approach to the study of economic organization. As compared with other approaches to the study of economic organization, transaction cost economics (1) is more microanalytic, (2) is more self-conscious about its behavioral assumptions, (3) introduces and develops the economic importance of asset specificity, (4) relies more on comparative institutional analysis, (5) regards the business firm as a governance structure rather than a production function, (6) places greater weight on the ex post institutions of contract, with special emphasis on private ordering, and (7) works out of a combined law, economics, and organization perspective. Friction, the economic counterpart for which is transaction costs, is pervasive in both physical and economic systems.

The organization of work a comparative institutional assessment

Abstract: Sociologists, radical economists and others who claim that hierarchical modes of organization are explained by power rather than efficiency neglect transaction costs in reaching this conclusion. This is understandable since neoclassical economics also neglects transaction cost But it is also regrettable, since the transaction costs that arise when intermediate product is transferred across technologically separable stages of production depends crucially on organizational structure. A microanalytic assessment of alternative modes of organization entails (1) an identification of the relevant transaction cost dimensions for assessing performance, (2) a description of the organizational and operating properties of alternative modes, and (3) a comparative evaluation of alternative modes in terms of their transaction cost attributes. Transaction costs drive organizational outcomes in considerable degree.

The iron cage revisited institutional isomorphism and collective rationality in organizational fields

Abstract: What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

Social Capital in the Creation of Human Capital

Abstract: In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analys...

Absorptive capacity: a new perspective on learning and innovation

Abstract: In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **