We propose a new theory of the firm based on the premise that "the firm" characterizes a factor-integrative form of doing business that is often the most effective and efficient structure for doing well by doing bad. We define the terms and requirements involved for such a theory, and fulfill...

Purpose: The aim of this paper is to conceptualize the connection between business model and business reality. On this basis, the paper aims to put the business model on a solid conceptual basis and to build bridges to its neighbouring concepts. In this way, this paper should to contribute to...

We study optimal promotion decisions of hierarchical firms, with one junior and one senior managerial position, which interact in a search and matching labour market. Workers acquire experience over time while being employed in a junior position and the firm has to determine the experience level...

The paper revisits the fundamental question of the nature of the firm by contrasting two philosophic worldviews suggested by process philosophy and the Luhmannian systems theory. Whereas the former worldview takes reality to be internally related, the latter ones underscores the tendency of...

Chester Barnard’s work can be shown to contain subversive elements which accord with the spirit of institutionalist scholarship. Barnard saw corporations as systems of power whose sustainability must be backed by moral resources which are becoming increasingly scarce today. This vision...

We study the behavior of a firm that consistently maximizes a misspecified profit function. We provide an equilibrium concept where the misspecification error remains undetected. We examine the uniqueness and stability of the equilibria. The model of the price-taking firm belongs to this class....

The internalisation theory of the Multinational Enterprise (MNE) explains MNE decisions to make/buy and/or ally, based on market and intra-organisational (firm/hierarchy) transactions costs. The theory focused on a limited set of categories, actors and sources of transaction costs and has...

We study the behavior of a firm that consistently maximizes a misspecified profit function. We provide an equilibrium concept where the misspecification error remains undetected. We examine the uniqueness and stability of the equilibria. The model of the price-taking firm belongs to this class....

The objectives of the paper are aimed at examining, identifying and elaborating the key points of overlapping and divergence of the ideas of the resource-based view of the firm and entrepreneurship. In the conditions when literature is not saturated related to the subject matter, the original...

Research in the “theory of the firm” tradition has often characterized firms as subeconomies in which economic exchange is shaped by a central authority. We propose an expanded view of firms as subsocieties in which authority is further responsible for establishing principles that shape...

Plant (1937) versus Coase (1937) on the firm. Outlines of and comparisons between ‘The Nature of the Firm’ and ‘Centralise or Decentralise?’ are given. The nature of the relationship between the two papers is discussed

Markets and firms offer contrasting methods to arrange production. In markets, contracts govern the purchase of parts and services that compose production. In firms, the shared values, customs, and norms coming from a corporate culture govern employees’ joint development of those parts and...

Larger firms (by sales or employment) have higher leverage. This pattern is explained using a model in which firms produce multiple varieties, acquire new varieties from their inventors, and borrow against the future cash flow of the firm with the option to default. A variety can die with a...

This paper considers the consequences of a two-sector vertically-integrated model of firms producing output using firm-specific capital with a second sector producing firm-specific capital by adapting raw capital purchased in the market. Analysts rarely observe each sector separately....

Chapter 1. What is Economics? -- Chapter 2. Exchange and Demand -- Chapter 3. Determination of Prices -- Chapter 4. Capital, Interest and Production -- Chapter 5. Prices of Factors of Production -- Chapter 6. Money and the Business Cycle -- Chapter 7. Competition and Entrepreneurship -- Chapter...

We propose a new theory of the firm based on the premise that "the firm" characterizes a factor-integrative form of doing business that is often the most effective and efficient structure for doing well by doing bad. We define the terms and requirements involved for such a theory, and fulfill...

We study optimal promotion decisions of hierarchical firms, with one junior and one senior managerial position, which interact in a search and matching labour market. Workers acquire experience over time while being employed in a junior position and the firm has to determine the experience level...

Purpose: This study seeks to analyse how the servitization topic has been addressed through different theoretical approaches. More specifically, the aim is to answer two key questions: What theoretical approaches have been used to study the phenomenon of servitization? What specific aspects of...

This paper considers two models for analyzing the dynamics of firm behavior that allow for heterogeneity among firms, idiosyncratic (or firm specific) sources of uncertainty, and discrete outcomes (exit and/or entry). Models with these characteristics are needed for the structural econometric...

Many factors including incentive-pay, powerful shareholders, and takeover threats push for-profits managers towards maximizing shareholder value. One of the most striking factors about non-profit firms is that they have no comparable governance institutions, and the only check on managers are...

We provide a first empirical analysis of firm commitments to reduce their carbon emissions. A growing fraction of publicly traded companies around the world have already voluntarily made commitments to attain reductions in their emissions by a certain date or to reduce the emission intensity of...

In this paper, we develop a simple model of international outsourcing and apply it to processing trade in China. We observe China's processing exports broken down by who owns the plant and by who controls the inputs the plant processes. Multinational firms engaged in export processing in China...

We argue here for a broader view of the biases in managers' decisions: In general, managerial rent-seeking affects not only the level of investment, but also the form. Our basic hypothesis is simple: given the now well-established scope for managerial discretion, managers have an incentive to...

When a firm forms a market closes. Resources that were previously allocated via the price system are allocated by managerial authority within the firm. We explore this choice of organizational form using a model of price formation in which agents negotiate prices on behalf of their principals...

We examine HMO participation and enrollment in the Medicare risk market for the years 1990 to 1995. We develop a profit- maximization model of HMO behavior, which explicitly considers potential linkages between an HMO's production decision in the commercial enrollee market and its participation...

This paper discusses some of the attempts economists have made in the last ten years or so to integrate norms into the theory of the firm. The paper argues that (a) although norms are undoubtedly very important both inside and between firms, incorporating them into the theory has been very...

Entrepreneurs who start new firms may choose not-for-profit status as a means of committing to soft incentives. Such incentives protect donors, volunteers, consumers and employees from ex post expropriation of profits by the entrepreneur. We derive conditions under which completely...