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ORGANISATIONAL CAPABILITIES AND INTERFIRM RELATIONS
Author(s) -
Loasby Brian J.
Publication year - 1994
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.1994.tb00022.x
Subject(s) - transaction cost , division of labour , database transaction , industrial organization , division (mathematics) , business , set (abstract data type) , value (mathematics) , base (topology) , knowledge base , economics , microeconomics , knowledge management , marketing , computer science , market economy , arithmetic , mathematics , machine learning , world wide web , programming language , mathematical analysis
The co‐ordination problem is a consequence of the division of labour and the division of knowledge; what is to be co‐ordinated is the generation and testing of novel conjectures. The firm provides one means of doing this, and of developing a set of capabilities which can be deployed to cope with structural uncertainty. Any firm's capabilities are inevitably limited, and must be supplemented; this requires the development of market relationships, and, where success depends on closely‐complementary activities founded on a different knowledge base, the organisation of interfirm co‐operation. The additional value thus created may justify additional transaction costs.