For decades, the literatures on firm capabilities and organizational economics have been at odds with each other, specifically relative to explaining organizational boundaries and heterogeneity. We briefly trace the history of the relationship between the capabilities literature and organizational economics and point to the dominance of a “capabilities first” logic in this relationship. We argue that capabilities considerations are inherently intertwined with questions about organizational boundaries and internal organization, and use this point to respond to the prevalent “capabilities first” logic. We offer an integrative research agenda that focuses, first, on the governance of capabilities and, second, on the capability of governance.
Foss, Nicilai J.; Klein, Peter G.; Linder, Stefan(Frederiksberg, 2013)
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Abstract:
Austrian economics focuses on markets, but has much to say about organizations. In
particular, Austrian insights on the structure of production, the heterogeneity and
subjectivity of resources, the nature of uncertainty, the role of monetary calculation,
and the function of the entrepreneur provide solid foundations for a distinctly
Austrian theory of organizations. We review these insights, discuss recent literature
on Austrian economics and the theory of the firm, and suggest new directions for
developing and extending an Austrian approach to organizations.