Abstract This paper analyses the role of the managers' non-pecuniary private benefits in an incomplete contract approach to the regulation of utilities. Private benefits may take various forms: excessive job security, perks, overstaffing, feeling of power. The model describes the relationship...

Abstract A principal needs a worker for the production of a good. The worker can be hired as an internal agent, or an external agent under a contract. These two organizational modes correspond to in-house production and outsourcing, respectively. In each case, the agent earns experience...

Summary The focus of evolutionary economics is a process of continuous and irreversible economic and organizational change over time. Currently there is no agreement on the explanation of economic evolution. From the perspective of the history of economic thought, at first the theoretical...

Summary Does evolutionary theory help, for a theory of the firm, or, more widely, a theory of organization? In this paper I argue that it does, to some but also limited extent. Evolutionary theories of economies, and of culture, have acquired considerable following, but have also been subject to...

This paper applies Israel Kirzner’s theory of entrepreneurship and the Austrian theory of capital to the theory of the firm. In particular, it explores why some firms are better able to react to exogenous change than others, especially when that change is negative. The argument is that firms...

The paper argues that Israel Kirzner’s theory of entrepreneurship has been influential on a number of related “dynamic” theories of organization. Kirzner’s theory is animated by a dual concern – the process (rather than the result) of rentseeking behavior and the fundamental incompletness...

Purpose – The purpose of this paper is to attempt a justification as to why a profit-making firm may be viewed as a function of its nucleus expertise and a risky portfolio of deals. Design/methodology/approach – This is a theoretical paper relying on mathematics, graphs and verbal arguments...

Purpose – The purpose of this paper is to demonstrate the usefulness of referring to a theory of the firm as a way to strongly improve internal consistency in both research and practice. To this end, the paper explores how a theory-of-the-firm perspective can assist in a consistent analysis of...

Purpose – The purpose of the paper is to offer some advancing in the understanding of the market-to-book value (MBV) gap (or ratio) as the symptom and the metrics for intellectual capital (IC) value, and to discuss the major criticisms against it. The original contribution of the paper lies in...

Purpose – The paper was written with the intention of drawing attention to a fundamental dysfunction that is widespread in large organizations today – a myopic focus on maximizing shareholder value. Design/methodology/approach – The paper identifies the source of the dysfunction, the...