Property Rights at the AoM

12 August 2006 at 9:45 am Nicolai Foss Leave a comment

| Nicolai Foss |

A host of economics approaches have been influential in strategic management research, inclucing transaction cost economics, and the highly overlapping approaches of information economics, game theory, and industrial organization theory.

However, property rights economics as developed by Ronald Coase, Harold Demsetz, Steven Cheung, and its perhaps most sophisticated contemporary proponent, Yoram Barzel, has not been much used in strategic management, save for discussions of intellectual property rights (a big problem with communicating principles of property rights economics is that most academics immediately associate to IPR which, of course, is just a small subset of the many applications of property rights economics).

Things may be changing, however.Yesterday I took part in a Professional Development Workshop at the Academy of Management on “Advances in Competitive Advantage: Building Blocks and Future of the Resource-based View,” organized by Ilgaz and Asli Arikan, both of the Georgia State University. Great line-up. A number of heavyweights (Jay Barney, Russ Coff, Dan Levinthal, Anita McGahan, Joe Mahoney, Rich Makadok, Will Mitchell, Margaret Peteraf), and a Euro-dude (yours truly). It was a bit of a lovefest, which I suppose may be warranted, given the extreme success of the RBV over the last two decades and the fact that most of the panelists have been highly instrumental in securing this success.

A number of the panelists/presenters made ample reference to the property rights approach. Like myself, Joe Mahoney has been arguing for a long time that the economics of property rights is of immediate relevance to strategy research (see, e.g., his papers with Jongwook Kim on this page), and he very eloquently made the same arguments yesterday. I was more surprised (very pleasantly surprised) to hear Anita McGahan endorse a property rights approach to the RBV. A number of the other panelists also made positive references to the property rights approach. My own presentation also focused on the relation between property rights ideas and the RBV. It is my impression that the basic notion in what may — perhaps too ambitiously — be called the “property rights approach to the RBV” — that resources are not discrete units but bundles of attributes (uses, functionalities, characteristics) to which property rights may be held — really resonates well with the RBV crowd.