Since its emergence in the 1970s the modern economic or Coasian theory of the firm has been discussed and challenged by sociologists, heterodox economists, management scholars, and other critics. This chapter reviews and assesses these critiques, focusing on behavioral issues (bounded...

We describe and discuss Ronald Coase's approach to managerial authority, placing it in the broader context of recent economics and management research on intrafirm coordination. To do so, we make use of work by Coase that is relatively little known, namely his writings on opportunity cost...

Should a firm make its own inputs, buy them on the spot market, or maintain an ongoing relationship with a particular supplier? The emergence of the transaction cost approach to vertical integration in the 1970s and 1980s generated a substantial body of empirical research on vertical firm...

The study of entrepreneurship and the study of economic organizing lack contact. In fact, the modern theory of the firm virtually ignores entrepreneurship, while the literature on entrepreneurship often sees little value in the economic theory of the firm. In contrast, we argue in this chapter...

We discuss the emergence of the theory of the firm (in the Coasian sense); survey and discuss the main currents of the theory of the firm, and discuss what has determined the emergence of the theory of the firm. We argue that advances in the theory of the firm have been strongly influenced by...

Research has examined how “economizing” and “strategizing” mechanisms interact in driving competitive outcomes, but the role of coalitions in this process has received little attention. Coalitions between players are established to increase value creation (i.e., economizing), as well as...

Ever since its emergence in the 1970s the modern economic or Coasian theory of the firm has been discussed and challenged by sociologists, heterodox economists, management scholars, and other critics. This chapter reviews and assesses these critiques, focusing on behavioral issues (bounded...

The rise of contract farming and vertical integration is one of the most important changes in modern agriculture. Yet the adoption and diffusion of these new forms of organization has varied widely across regions, commodities, or farm types. Transaction cost theories have done much in helping us...

This essay surveys the new institutional economics, a rapidly growing literature combining economics, law, organization theory, political science, sociology, and anthropology to understand social, political, and commercial institutions. This literature tries to explain what institutions are, how...