Authority Sharing, Careers and Competence Development in Different Market Economies: Beyond the firm-market dichotomy

Much recent work on firms' capabilities and competitive competences builds on Penrose's (1959) seminal contribution to the theory of the firm in emphasising their organisational nature, and the critical role of managerial routines in transforming resources into distinctive services (see, e.g. Dosi et al., 2000; Foss and Knudsen, 1996; Lazonick, 1991). By organising human and material inputs systematically through firm specific rules and procedures, managers generate idiosyncratic collective advantages that are not easily tradable. Firms, in the competence or resource-based view, develop unique capabilities that enable them to compete effectively through establishing collective routines and learning processes.This focus on the organisational nature of competitive competences has tended to reinforce the traditional opposition of firms and markets as distinct forms of economic organisation in much Anglo-Saxon analysis. Firms have often been seen as isolated, strongly bounded units of financial control in which managerial authority coordinated economic activities amid anonymous, spot market contractual relationships. As Richardson suggested (1972: 883), many economists conceive firms as "islands of planned coordination in a sea of market relations" and contrast their cohesive, integrated nature with the anarchy of price based market transactions. Such a sharp contrast does, though, obscure the considerable variety of organisational arrangements within firms, as well as the organised nature of many markets. Even in the liberal market economies of the UK and the USA, markets have been, and are still, characterised by a wide variety of inter-firm cooperative relationships, with many competitors forming alliances and partnerships, as Richardson went on to point out....