Organizations and Markets

Norway Workshop on Org Econ and Org Capabilities

30 May 2010 at 6:32 am Nicolai Foss 1 comment

| Nicolai Foss |

With Nick Argyres, Teppo Felin, and Todd Zenger, I am editing a special issue of Organization Science on “Organizational Capabilities and Organizational Economics: From Opposition and Complementarity to Real Integration.” We received 84 submissions and invited a fair amount of R&Rs. To help improve those R&Rs and to stimulate discussed, we organized, with the (practical) help of Professor Sven Haugland and (financial help) the Norwegian School of Economics and Business Administration, a small workshop that took place this Friday and Saturday (28-29 May) at the magnificent Hotel Solstrand, outside of Bergen. The discussions were informative, high-level, and friendly; the weather behaved (Bergen is the most rainy city in Europe); the food was excellent; etc. A model workshop, in short. 

A few key points (I will refrain from commenting on the R&R  papers):

• Out of 11 papers, 1 was theoretical, 2 were simulation papers, and the rest  were empirical. All creatively brought both capabilities and OE ideas to bear on issues of economic organization (including internal organization).
• I argued that virtually all debate on capabilities and economic organization had been dominated by a “capabilities first” heuristic, in which capabilities are primary and transaction costs were, as it were, second-order (e.g., transaction costs moderate the relation between capabilities and vertical scope). It is time to reverse causality and examine how capabilities emerge from “transacting.”
• Nick Argyres and Todd Zenger presented a paper that followed up on this by showing how capabilities can be understood as reflecting specific investments.
• Nevertheless, there was some skepticism regarding whether it is useful to talk about a debate, not just because of the dominance of the capabilities view in that debate, but also because it was better to consider problems “agnostically” and choose flexibly among the available tools, whether drawn from the capabilities or the TCE toolbox. Michael Jacobides argued this point with so much passion that everyone cracked up when Teppo Felin observed that Michael was more of a high-priest than an agnostic.  
• “OE” was generally interpreted as “transaction cost economics”; not a single paper brought agency and property rights issues to bear on these issues.

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Entry filed under: - Foss -, Conferences.