The purpose of this paper is to discuss the conditions under which capability, transaction and scale considerations interact in determining organisational boundaries. I will argue that this interaction contributes to explaining the individual firms performance and growth whenever cognitive...

The inability to predict the future impact of innovations generates surprise and inconsistency of expectations, thereby giving rise to substantive uncertainty. In this paper I concentrate the analysis on organisational response to unforeseen transformations of environmental conditions stemming...

This article presents a critical review of advances in incentive-based and knowledgebased theories of the firm. In particular, we address some developments in the incentive-based approach regarding relational contracts and contracts as “reference points”. As far as the evolution of...

This paper shows that the Cournot-Marshall dilemma on the incompatibility of increasing returns and competition may be overcome under an integrated theory of the firm that takes into account not only returns to scale but also knowledge and transaction cost considerations. Knowledge and...

This paper shows that some explanations provided by transaction costs and capabilities analyses are complementary - rather than independent or rival - accounts of organisational boundaries. Transactions and capabilities considerations interplay in a two-way dynamic interaction in determining the...