https://www.sfu.ca/~wainwrig/Econ400/jensen-meckling.pdf

Theory of the firm: Managerial behavior, agency costs and ownership structure

Firm Resources and Sustained Competitive Advantage

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.

/pdf/the-iron-cage-revisited-institutional-isomorphism-and-xas5qn5nhy.pdf

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

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...

/pdf/social-capital-in-the-creation-of-human-capital-1836wo2872.pdf

Social Capital in the Creation of Human Capital

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. **

/pdf/absorptive-capacity-a-new-perspective-on-learning-and-1n1c9gg9x0.pdf

Absorptive capacity: a new perspective on learning and innovation

This paper tracks my remarks at the September 1993 conference honoring Richard M. Cyert. It begins with some recollections of my years as a graduate student at GSIA in the early 1960s. I then shift to transaction cost economics and how this project relates to what I learned from Dick Cyert and others at Carnegie.

Transaction cost economics and the Carnegie connection

There is much in the paper by Samuel Bowles and Herbert Gintis with which I agree. But there are also real differences—which is to be expected, since they and I examine economic organization through very different lenses. Thus whereas they view economic organization through the lens of power and contested exchange, I believe that economizing and governance is, for most purposes, a more productive perspective. I also have a variety of minor differences with their paper. I begin with our agreements, next consider conceptual differences, and then run through the more minor matters.

https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.7.1.103

Contested Exchange versus the Governance of Contractual Relations

The lens of contract approach to the study of economic organization is partly complementary but also partly rival to the orthodox lens of choice. Specifically, whereas the latter focuses on simple market exchange, the lens of contract is predominantly concerned with the complex contracts. Among the major differences is that non-standard and unfamiliar contractual practices and organizational structures that orthodoxy interprets as manifestations of monopoly are often perceived to serve economizing purposes under the lens of contract. A major reason for these and other differences is that orthodoxy is dismissive of organization theory whereas organization theory provides conceptual foundations for the lens of contract. Copyright 2003, Oxford University Press.

Examining economic organization through the lens of contract

Viewing the firm as a governance structure, rather than as a production function, has had numerous ramifications. For one thing, the boundary of the firm is no longer defined by technology but is something to be derived (from comparative transaction cost considerations). For another, marginal analysis gives way to discrete structural analysis (Simon, 1978; Williamson, 1991). Also, attention is focused on much more microanalytic features of transactions and organization. The roles of power and authority come under renewed scrutiny in the process.

Oliver E. Williamson

Papers

Transaction cost economics and the Carnegie connection

Contested Exchange versus the Governance of Contractual Relations

Examining economic organization through the lens of contract

Efficiency, Power, Authority and Economic Organization

Corporate Control and Business Behavior.