1_What is the Firm
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Entrepreneurial theory: owner – firm relationships
Enterprise as a subject of entrepreneurial initiative and application of resources in possession of entrepreneur.
Model of enterprise is described by relations between entrepreneur and his business.
What is the Firm?
Entrepreneurial theory: owner – firm relationships
Enterprise as a subject of entrepreneurial initiative and application of resources in possession of entrepreneur.
Model of enterprise is described by relations between entrepreneur and his business.
What is the Firm?
Institutional concepts of the firm: Transaction Cost Theory (TCT)
Ronald Coase’s (Nobel
Prize-winner, 1991) theory:
the unit of analysis in
TCT
is a transaction, which
“occurs
when a good or service is transferred across
a technologically separate interface”.
What is the Firm?
Transaction cost theory
Main dependent |
Main independent |
constructs / factors |
constructs / factors |
Governance structure |
Coordination costs |
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Degree of outsourcing |
Operational risk |
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Outsourcing success |
Asset specificity |
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Inter-organizational |
Uncertainty |
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coordination and |
Trust |
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collaboration |
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What is the Firm?
Institutional concepts of the firm: Oliver Williamson’s approach
Oliver Williamson is Nobel
Prize winner, 2009
The approach argues that the minimizing,
or “economizing”, of transaction costs
is the primary motivation for adopting different structures
What is the Firm?
Williamson’s approach: basics
There are three critical dimensions of the transaction:
Uncertainty of the transactions
Frequency of occurrence
The level of transaction-specific investment required
What is the Firm?
More theoretical issues…
Agency theory
Human relations theory
Knowledge-based theory
Resource Dependence theory
Modern conceptual trend: firm’s differentiation
Uncertainty as the main disadvantage of conclusions made on the basis of existing concepts
The development of “individual” theory for each concrete business unit based on its unique experience and on the vision of key shareholders and managers
What is the Firm?
System integration concept of the firm
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Corporate culture |
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Corporate values |
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Knowledge |
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Business experience |
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Business Processes |
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Output |
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Business environment |
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Cases |
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analysis |
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Firm’s inherent behavior |
History |
The business environment of the firm: types
Internal environment
External environment
What is the Firm?