Economic Foundations of Strategy provides not only the essential basic tenets of strategy, it also shows the inter-relationships of five major theories of the firm: the behavioral theory; transaction costs theory; property rights theory; agency theory; and dynamic resource-based theory. Even though technological, organizational and institutional change advances breathlessly, the theories of the firm provided in this research book are durable principles that have stood, and the author maintains will continue to stand, the test of time. Economic Foundations of Strategy emphasizes the complementarities among these five theories of organization, and the potential for integrating these theories in the evolving science of organization. Applications of these theories to business practice are emphasized throughout the book.
Chapter 6: The Theoretic Building Blocks of Organizational Economics
The Theoretic Building Blocks of Organizational Economics
In this research book, I have maintained that an integrated organizational economics research program is a feasible, challenging, and rewarding endeavor in pursuing the evolving science of organization. Toward that end, five major theories of the firm were reviewed and interrelated: (1) the behavioral theory of the firm, (2) transaction costs theory, (3) property rights theory, (4) agency theory, and (5) dynamic resource-based theory. In my judgment, content research (e.g., deductive agency and transaction costs economics) and process research (e.g., research on cognitive psychology and the behavioral theory of the firm) need to be joined in the next generation of organizational economics research.
My major philosophical position in this book is that for ...