Law and Strategy
3 February 2012 at 10:53 am Peter G. Klein 2 comments
| Peter Klein |
Over at The Conglomerate, Gordon Smith asks:
Law professors teach and write about topics like public choice, agency capture, rent seeking, etc., but I don’t often hear law professors talking systematically about the use of law for strategic purposes. . . . In simplest terms, the study of law and strategy views the world from the perspective of a business and asks: how can we use law to gain a competitive advantage? This question ought to be of interest to lawyers, but does any law school teach a class on law and strategy?
The context is Richard Shell’s book Make the Rules or Your Rivals Will, which sounds interesting and important. Perhaps the O&M readership can help? The emerging field of non-market strategy (1, 2), led by people like David Baron, Vit Henisz, and the de Figueiredo brothers, studies how firms use not only law but also the regulatory system, bureaucracies, and other non-market features to achieve competitive advantage. The older economics literatures on public choice and rent-seeking of course deal with these issues as well, but typically from “society’s” point of view, rather than the firm’s. As for teaching, I see from a little Googling that John de Figueiredo is teaching law and strategy at Duke, and I suspect other members of the non-market strategy crowd housed at law schools do so as well. Suggestions for Gordon?
Entry filed under: - Klein -, Institutions, Law and Economics, Strategic Management, Teaching.
Organizations and Markets 
1.
Juan M | 3 February 2012 at 6:40 pm
One: there are enough law and… subjects already
Two:game theory has been taught for a while
2.
Michael Marotta | 5 February 2012 at 10:03 am
“Beware the Dark Side, Luke!” We know all too well that firms seek legal advantages; and generally we condemn that as immoral. It corrupts the market and the government both.
Yet, on the other hand, John Braithwaite came to his theory of re-integrative shaming as a means of “community corrections” in preference to prison, exactly via this same route. Investigating the regulation of the pharmaceutical industry, Braithwaite soon found that showing up with a subpoena only gets you to the lawyers. If you show up for coffee with the plant manager, you stand a better chance of gaining the conformance and compliance you seek. More flies with sugar and all that…
That still leave unanswered the basic questions. To what extent do we really want to encourage “partnerships” between business and government?
With that, though, it is interesting to suggest the entire spectrum as a field of study. It might actually reveal good outcomes. You never know…