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The visible and the invisible hand: Resource allocation in the industrial sector
Author(s) -
Bettis Richard A.,
Prahalad C. K.
Publication year - 1983
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250040104
Subject(s) - politics , resource allocation , diversity (politics) , ideology , capital (architecture) , resource (disambiguation) , economics , economic system , industrial organization , capital market , process (computing) , capital allocation line , state (computer science) , market economy , business , political science , finance , computer network , archaeology , computer science , law , history , incentive , operating system , algorithm
The standard economic analysis holds that resource allocation in the industrial sector is primarily a market process operating through the capital markets. The current political resurgence of free market economics has popularized this approach. Contrary to this approach the authors demonstrate that: (1) trends in the size, diversity and administrative complexity of firms; (2) structural features of the capital markets; and (3) the emergence of the state as a major source of capital in developed countries imply that internal organizational and political/ ideological considerations are also vital to understanding resource allocation in the economy.