"Every company needs a unique and insightful corporate theory to sustain value-creating growth. Such a theory, if done right, should help guide decisions about what assets and activities to pursue, what investments to make, and what strategies to adopt. It's not easy, though, because the process...

A large literature has developed in recent years that attempts to compare transaction cost and capabilities explanations of firms' vertical boundaries. Much of this literature has treated comparative capabilities (buyers' vs. potential suppliers') as determinants that are independent of...

When should an entrepreneur employ a market to help discover and exploit opportunities, and when should the entrepreneur create a firm to do so? If a firm is created, how should it be organized? In this paper we argue that opportunities equate to valuable problem-solution pairings, and that...

Firms' boundary choices have undergone careful examination in recent years, particularly in information services. While transaction cost economics provides a widely tested explanation for boundary choice, more recent theoretical work advances competing knowledge-based and measurement cost...

We develop in this paper a knowledge-based theory of the firm. While existing knowledge-based theory focuses on the efficiency of hierarchy in economizing on knowledge exchange, we develop a theory of the firm which focuses on the efficiency of alternative organizational forms in generating...

Knowledge-based theorists have developed two primary arguments to explain the existence of firms: one based on avoiding knowledge transfer and the other based on facilitating knowledge transfer. These arguments are not only contradictory, but also fail to predict when hierarchies supplant...

Knowledge-based theorists have developed two primary arguments to explain the existence of firms: one based on avoiding knowledge transfer and the other based on facilitating knowledge transfer. These arguments are not only contradictory, but also fail to predict when hierarchies supplant...

While the literature on firm boundaries has been greatly influenced by transaction cost economics, strategy scholars often emphasize the importance of capabilities considerations in these decisions. This has led to a debate that, we suggest, has generated more heat than light. We argue that the...