Scholars of the theory of the firm have begun to emphasize the sources and conditions of what has been described as “the organizational advantage,” rather than focus on the causes and consequences of market failure. Typically, researchers see such organizational advantage as accruing from the particular capabilities organizations have for creating and sharing knowledge. In this article we seek to contribute to this body of work by developing the following arguments: (1) social capital facilitates the creation of new intellectual capital; (2) organizations, as institutional settings, are conducive to the development of high levels of social capital; and (3) it is because of their more dense social capital that firms, within certain limits, have an advantage over markets in creating and sharing intellectual capital. We present a model that incorporates this overall argument in the form of a series of hypothesized relationships between different dimensions of social capital and the main mechanisms and proces...

https://www.jstor.org/stable/pdfplus/259373.pdf

Social Capital, Intellectual Capital, and the Organizational Advantage

Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.

Toward a Knowledge-Based Theory of the Firm,” Strategic Management Journal (17), pp.

https://memberfiles.freewebs.com/84/90/65819084/documents/TOWARD%20A%20KNOWLEDGE-BASED%20THEORY%20OF%20THE.pdf

Toward a Knowledge-Based Theory of the Firm

In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advantage is the relationship between firms and identify four potential sources of interorganizational competitive advantage: (1) relation-specific assets, (2) knowledge-sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view.

https://www.jstor.org/stable/pdfplus/259056.pdf

The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage

This paper draws on the social and behavioral sciences in an endeavor to specify the nature and microfoundations of the capabilities necessary to sustain superior enterprise performance in an open economy with rapid innovation and globally dispersed sources of invention, innovation, and manufacturing capability. Dynamic capabilities enable business enterprises to create, deploy, and protect the intangible assets that support superior long- run business performance. The microfoundations of dynamic capabilities—the distinct skills, processes, procedures, organizational structures, decision rules, and disciplines—which undergird enterprise-level sensing, seizing, and reconfiguring capacities are difficult to develop and deploy. Enterprises with strong dynamic capabilities are intensely entrepreneurial. They not only adapt to business ecosystems, but also shape them through innovation and through collaboration with other enterprises, entities, and institutions. The framework advanced can help scholars understand the foundations of long-run enterprise success while helping managers delineate relevant strategic considerations and the priorities they must adopt to enhance enterprise performance and escape the zero profit tendency associated with operating in markets open to global competition. Copyright  2007 John Wiley & Sons, Ltd.

/pdf/explicating-dynamic-capabilities-the-nature-and-48rcozomaz.pdf

Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance

Using data collected from multiple respondents in all the business units of a large multinational electronics company, we examined the relationships both among the structural, relational, and cogni...

/pdf/social-capital-and-value-creation-the-role-of-intrafirm-3uuwrj6crb.pdf

Social Capital and Value Creation: The Role of Intrafirm Networks

Widely acclaimed for its perceptive insights into the management of companies operating in an international environment, "Managing Across Borders" has established itself as a landmark book. Bartlett and Ghoshal describe the emergence of a revolutionary corporate form - the transnational - and reveal how the nature of the global competitive game has fundamentally changed."Highly readable! Valuable lessons for companies in a wide range of industries and sizes-indeed, almost any organization operating several different businesses across borders." - "The Financial Times". "A fascinating book! The conclusions certainly break away from the perceived wisdom about the factors needed for success in global markets." - "Management Today". "Managing Across Borders" makes clear that success in global strategy is as much a function of the ability to organize and manage as it is the ability to create a sound strategy. Bartlett and Ghoshal make an important and highly practical contribution in a book that represents the leading edge of thinking on this important subject." - Michael E.Porter, Bishop William Lawrence University Professor, Harvard Business School, and author of "Competitive Strategy".

Managing Across Borders: The Transnational Solution

This article argues that academic research related to the conduct of business and management has had some very significant and negative influences on the practice of management. These influences ha...

Bad Management Theories Are Destroying Good Management Practices

Transaction cost economics (TCE), and more specifically the version of TCE that has been developed by Oliver Williamson (1975, 1985, 1993b), has become an increasingly important anchor for the analysis of a wide range of strategic and organizational issues of considerable importance to firms. As argued by some of its key proponents, the theory aims not only to explain but also to influence practice (Masten, 1993). In this article, we argue that prescriptions drawn from this theory are likely to be not only wrong but also dangerous for corporate managers because of the assumptions and logic on which it is grounded. Organizations are not mere substitutes for structuring efficient transactions when markets fail; they possess unique advantages for governing certain kinds of economic activities through a logic that is very different from that of a market. TCE is “bad for practice” because it fails to recognize this difference. We identify some of the sources of the “organizational advantage” and argue for the ...

Sumantra Ghoshal

Papers

Social Capital, Intellectual Capital, and the Organizational Advantage

Social Capital and Value Creation: The Role of Intrafirm Networks

Managing Across Borders: The Transnational Solution

Bad Management Theories Are Destroying Good Management Practices

Bad for Practice: A Critique of the Transaction Cost Theory