Two professors from my group, Nick Argyres and Todd Zenger, together with Teppo Felin of BYU and Nicolai Foss of Copenhagen Business School are going to co-edit a special issue of Organization Science (now ranks as the 4th most influential management journal according to JCR, even made it to the 3rd a year ago), on Organizational Economics and Organizational Capabilities: From Opposition and Complementarity to Real Integration. I am very exicted about this ongoing trend and just in the PhD seminar last week, we and Todd discussed this paper by Nick and him, "Capabilities, Transaction Costs, and Firm Boundaries: A Dynamic Perspective and Integration", which is exactly an integration of Transaction Cost View and Capability based View of the firm. I highly recommend this paper to those of you who are passionate about organizational economics, business strategy and their ongoing blending, although I am still not so convinced on part of the illustration of the Disney case. Here is the abstract:
A large literature has developed in recent years that attempts to compare transaction cost and capabilities explanations of firms' vertical boundaries. Much of this literature has treated comparative capabilities (buyers' vs. potential suppliers') as determinants that are independent of transaction costs, based on the idea that capabilities theories of the firm are distinct from the transaction cost theory of the firm. We argue that this approach is mistaken. We contend that capabilities and transaction cost determinants interact with each other dynamically, and that the two theories of the firm cannot be conceptually distinguished. We then seek to articulate an integrated perspective that incorporates both capabilities and transaction cost logic. Our argument carries implications for theories of the firm, and for empirical research aimed at testing those theories.
As to the special issue, papers can be both theoretical and empirical, and must be submitted between Oct. 1 and Oct. 30, 2009.
Hat tip to Nicolai Foss.