Browsing by Author "Foss, Kirsten"
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Integration with Transaction Cost EconomicsFoss, Kirsten; Foss, Nicolai J. (København, 2004)[More information][Less information]
Abstract: This essay addresses the role of transaction cost economics (TCE) in advancing the resource-based view. In particular, it is argued that TCE has the potential to remedy a number of weak spots in the RBV, such as the absence of attention in the RBV to the interaction between value creation and value appropriation. This and other weak spots in the RBV stem from not taking account of transaction costs to a sufficient extent. Integrating TCE with the RBV adds new insight into the analysis of sustained competitive advantage. Keywords The resource-based view, transaction cost economics, sustained competitive advantage. URI: http://hdl.handle.net/10398/7303 Files in this item: 1
ckg-wp202004-04.pdf (186.7Kb) -
An Exploratory Discussion of Austrian Economics, Property Rights, and the FirmFoss, Kirsten; Foss, Nicolai J. (København, 2001)[More information][Less information]
Abstract: Many economists, notably Austrian economists, have argued that the market process is essentially an experimental process. We briefly try to clarify this conceptualization, and then argue that we may understand the firm in much the same light. A basic view of the firm as an experimental entity is derived, drawing on property rights insights. JEL Code: D21, D23, D83 URI: http://hdl.handle.net/10398/6929 Files in this item: 1
linkwp01-10.pdf (231.2Kb) -
The Role of FirmsFoss, Nicolai J.; Foss, Kirsten (Frederiksberg, 1999)[More information][Less information]
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A Coordination Perspective on the FirmFoss, Kirsten (København, 2000)[More information][Less information]
Abstract: This paper develops a coordination perspective on the firm. The basic idea is to combine insights in the division of labor with insights into the allocation of property rights. Thus, a basic argument is that use rights over productive assets are necessary in order to accumulate the experience needed to perform improvements in production. Specialization in production accelerates the accumulation of skills from learning by doing in production. However, specialization introduces greater complexity and new kinds of tools and equipment and this in turn create uncertainty about the best way of coordinating the specialized and interdependent activities. The result may be bottlenecks in production and uneven development of components. Experimenting with the coordination of tasks is necessary in order to eliminate these problems. However, such experimentation is best facilitated by a certain structure of property rights. Coordination by direction provides a cheap way of conducting the experiments needed to collect information on how best to coordinate interdependent activities. URI: http://hdl.handle.net/10398/6919 Files in this item: 1
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An Entrepreneurial Theory of Economic OrganizationKlein, Peter G.; Foss, Nicolai J.; Foss, Kirsten (København, 2006)[More information][Less information]
Abstract: Recent work links entrepreneurship to the economic theory of firm using the Knightian concept of entrepreneurship as judgment. When judgment is complementary to other as-sets, and these assets or their services are traded in well-functioning markets, it makes sense for entrepreneurs to hire labor and own assets. The entrepreneur’s role, then, is to arrange or organize the human and capital assets under his control. We extend this Knightian concept of the firm by developing a theory of delegation under Knightian uncertainty. What we call original judgment belongs exclusively to owners, but owners may delegate a wide range of decision rights to subordinates, who exercise derived judgment. We call these employees "proxy-entrepreneurs," and ask how the firm’s or-ganizational structure — its formal and informal systems of rewards and punishments, rules for settling disputes and renegotiating agreements, means of evaluating perform-ance, and so on — can be designed to encourage forms of proxy-entrepreneurship that increase firm value while discouraging actions that destroy value. Building on key ideas from the entrepreneurship literature, Austrian economics, and the economic theory of the firm we develop a framework for analyzing the tradeoff between productive and de-structive proxy-entrepreneurship. We link this analysis to the employment relation and ownership structure, providing new insights into these and related issues in the eco-nomic theory of the firm. Keywords: Judgment, entrepreneur, delegation, employment relation, ownership. JEL Codes: B53, D23, L2 URI: http://hdl.handle.net/10398/7452 Files in this item: 1
smg 2006-48.pdf (368.6Kb) -
Foss, Kirsten; Foss, Nicolai J. (København, 2001)[More information][Less information]
Abstract: We argue that the property rights perspective, as developed by economists such as Coase, Alchian, Demsetz and Barzel, is uniquely positioned to inform and further the understanding of competitive strategy. This is because of its consistent focus on the capture and protection of property rights as a main explanatory principle; a principle that we argue may also be usefully applied to the study of firm strategy. In our view, all firms trade resources spent on capture and protection off against value creation. Strategizing concerns changing the tradeoff to the advantage of the firm by identifying and influencing impediments to value creation. We use these insights to derive a number of refutable propositions, and argue that key insights from both industrial organization economics and the resource-based view are consistent with the property rights perspective. URI: http://hdl.handle.net/10398/6866 Files in this item: 1
linkwp01-14.pdf (261.9Kb) -
Individuals, Teams and Research Infrastructure in the European UnionFoss, Kirsten; Foss, Nicolai (København, 2003)[More information][Less information]
Abstract: This report maps research in institutional economics in management science in the European Union for the 1995 to 2002 period. The reports applies Internet search based on a university listing, search on journal databases, key informants and an internet-based survey. 195 researchers are identified. In (sub-)disciplinary terms, organization, strategy, corporate governance, and international business are the major areas of application of institutional economics ideas. In terms of countries, the EU strongholds are Holland, Denmark, UK, and Germany. There is apparently no or very little relevant research in Ireland, Portugal, Luxembourg and Greece. Based on the findings of the report, it seems warranted to characterize the EU research effort in the field as being rather dispersed and uncoordinated. Thus, there are no specialized journals, associations or PhD courses. This state of affairs is partly explainable by the highly pragmatic way in which research in management science is typically conducted (so that institutional economics approaches are likely to be merely one type of input among many). Keywords Institutional economics, management science, European union. URI: http://hdl.handle.net/10398/7278 Files in this item: 1
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How the Economics of Property Rights Furthers the Resource-based ViewFoss, Kirsten; Foss, Nicolai J. (København, 2004)[More information][Less information]
Abstract: Abstract The economics of property rights furthers the resource-based view in a number of ways. Resource analysis is refined by conceptualizing resources as composed of multiple attributes to which property rights may be held. A resource owner’s ability to create, appropriate and sustain value from resources depends on the property rights that she holds to those resources and on the transaction costs of exchanging, defining and protecting the relevant property rights. While transaction costs are major sources of value dissipation, value may be created by reducing such dissipation. Implications for the RBV analysis of sustained competitive advantage are derived. URI: http://hdl.handle.net/10398/7297 Files in this item: 1
ckg-wp202004-09.pdf (318.9Kb) -
Implications for New Organizational FormsFoss, Kirsten; Foss, Nicolai J. (København, 2005)[More information][Less information]
Abstract: Two of Herbert Simon’s best-known papers are "The Architecture of Complexity" and "The Structure of Ill-Structured Problems." We discuss the neglected links between these two papers, highlighting the role of decomposition in the context of problems on which constraints have been imposed as a general approach to problem solving. We apply these Simonian ideas to organizational issues, specifically new organizational forms. Specifically, Simonian ideas allow us to develop a morphology of new organizational forms and to point to some design problems that characterize these forms. Keywords: Herbert Simon, problem-solving, new organizational forms. JEL Code: D23, D83 URI: http://hdl.handle.net/10398/7431 Files in this item: 1
cbs forskningsindberetning smg 28.pdf (508.4Kb) -
A Property Rights Perspective on The Nature of The FirmFoss, Kirsten (Frederiksberg, 1998)[More information][Less information]
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A Property Rights Perspective on The Nature of the FirmFoss, Kirsten (København, 1998)[More information][Less information]
Abstract: This paper develops a property rights perspective on the nature of the firm. The basic idea is that learning by doing in production and coordination stem from experience in production and that user rights over productive assets are necessary in order to accumulate the experience needed to perform improvements in production. Accumulation of skills from learning by doing in production is accelerated by specialization in production. However, specialization introduces greater complexity and new kinds of tools and equipment and this creates uncertainty about the best way of coordinating specialized interdependent activities. The result may be bottlenecks in production and uneven development of components. Experimenting in coordination is necessary in order to eliminate these problems. It is argued that the Coasian notion of firms where coordination is provided by the direction of managers provides a cheap way of conducting the experiments needed to collect information on how best to coordinate interdependent activities. URI: http://hdl.handle.net/10398/8103 Files in this item: 1
x645030758.pdf (120.7Kb) -
suppressing margins and entrepreneurshipFoss, Kirsten; Foss, Nicolai Juul (København, 2000)[More information][Less information]
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Examples From The Fruit and Vegetable MarketFoss, Kirsten (Frederiksberg, 1996)[More information][Less information]
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How Firms Can Make Credible Commitments That Make Opportunistic Managerial Intervention Less LikelyFoss, Kirsten; Foss, Nicolai J.; Vázquez-Vicente, Xosé H. (København, 2003)[More information][Less information]
Abstract: Abstract We discuss and empirically examine a firm-level equivalent of the ancient problem of "tying the King’s hands," namely how to maximize managerial intervention for "good cause," while avoiding intervention for "bad cause." Managers may opportunistically intervene when such intervention produces private benefits. Overall firm performance is harmed as a result, because opportunistic managerial intervention harms employee motivation. The central point of the paper is that various mechanisms and factors, such as managers staking their personal reputation, employees controlling important assets, strong trade unions, corporate culture, etc. may function as constraints on managerial proclivities to opportunistically intervene. Thus, firms can make credible commitments that check managerial proclivities to opportunistically intervene. We derive 5 hypotheses from these ideas, and test them, using path-analysis, on a rich dataset, based on 329 firms in the Spanish food and electric/electronic industries. URI: http://hdl.handle.net/10398/7296 Files in this item: 1
03-10.pdf (708.8Kb) -
Foss, Kirsten; Foss, Nicolai (København, 2008)[More information][Less information]
Abstract: On November 24, 1874, United States Patent No. 157,124 was granted to Joseph Glidden of DeKalb, Ill., for improved barbed wire fencing. Glidden’s patent was the culmination of a series of nine patents for improvements to wire fencing that were granted by the U.S. Patent Offi ce to American inventors, beginning with Michael Kelly in November 1868 and ending with Glidden’s patent (McCallum and McCallum, 1965), which quickly became dominant. To be sure, wire fencing had been used for a very long time. However, property rights over livestock were less secure, as wire fencing would often break under the impact of heavy livestock pressing against the fencing. This would not happen with barbed wire, so the costs at which property rights to livestock could be protected fell dramatically (Dennen, 1976; Anderson and Hill, 2004). URI: http://hdl.handle.net/10398/7448 Files in this item: 1
smg wp 2008-26.pdf (294.3Kb) -
Foss, Kirsten; Foss, Nicolai J. (København, 2008)[More information][Less information]
Abstract: To add insight in new value creation, opportunity discovery should be integrated with strategic management theory. Based on the resource-based view and the economics of property rights we build a framework that accomplishes this. Our key argument is that property rights and transaction costs are important antecedents of opportunity discovery. We identify two mechanisms that establish this influence, and examine alternative ways in knowledge, transaction costs, and property rights influence opportunity discovery and sustainable advantage URI: http://hdl.handle.net/10398/7482 Files in this item: 1
smg wp 2008-18.pdf (407.9Kb) -
Residual Rights Of Control and Appropriable Control RightsFoss, Nicolai J.; Foss, Kirsten (Frederiksberg, 1999)[More information][Less information]
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Building Bridges Between the Economics of Property Rights and Strategic ManagementFoss, Kirsten; Foss, Nikolai J. (København, 2003)[More information][Less information]
Abstract: Abstract We forge linkages between the economics of property rights (Coase, Demsetz, Cheung, Barzel) and strategic management. Property rights to resources consist of the rights to consume, obtain income from, and alienate these resources. Transaction costs are the costs of exchanging, protecting and capturing property rights. We clarify the key role of transaction costs with respect to understanding value creation and the limitations and opportunities of strategizing relative to competitive forces. The economics of property rights identifies new sources of value creation (i.e., reducing the dissipation caused by transaction costs), and new types of resources (i.e., capture and protection capabilities), clarifies the role of contracting in the exercise of market power, and suggests that "strategizing" and "economizing" perspectives are related to a larger extent than is normally recognized. Refutable propositions are derived. URI: http://hdl.handle.net/10398/6868 Files in this item: 1
link2003-05.pdf (187.6Kb)
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