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Arriving at a strategic theory of the firm
Author(s) -
Phelan Steven E.,
Lewin Peter
Publication year - 2000
Publication title -
international journal of management reviews
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.475
H-Index - 107
eISSN - 1468-2370
pISSN - 1460-8545
DOI - 10.1111/1468-2370.00044
Subject(s) - coase theorem , theory of the firm , economics , work (physics) , strategic management , strategic interaction , firm offer , relation (database) , neoclassical economics , capital call , industrial organization , microeconomics , transaction cost , management , mechanical engineering , database , computer science , engineering , profit (economics) , individual capital , financial capital
The theory of the firm seeks to explain the existence and boundaries of the firm in relation to the market. Since the pioneering work of Coase (The nature of the firm. Economica , 4 , 386–405, 1937), economics has developed a whole family of theories that focus on the ability of firms to economize on certain costs of using markets. More recently, researchers in strategic management have published several theories of the firm that have tended to emphasize the benefits of incorporation rather than the costs of using the market. Although researchers in the strategy profession have tentatively labeled their work as ‘moving towards’ a strategic theory of the firm, economists have been very critical of existing approaches. This paper seeks to begin ‘arriving’ at a strategic theory of the firm by addressing these criticisms and offering an integration of the strategic and economic perspectives within an institutional framework. The paper concludes with future directions for research in the theory of the firm.