The Organizational Approach of Capability Theory: A Review Essay

Garzarelli, Giampaolo (2006): The Organizational Approach of Capability Theory: A Review Essay.

Abstract

Richard Langlois, Tony Yu & Paul Robertson have assembled a collection of previously published papers that move beyond textbook production theory. This essay discusses work by Frank Knight and Hendrik Houthakker not reproduced in LYR in relation to the capability theory of economic organization. Knight identified the problem of organization as the search for and the coordination of different dispersed capabilities. Houthakker helps us to see more clearly that the benefits of specialization are not brought at zero cost; whatever is the governance structure employed, there will inevitably be coordination costs due to differences in capabilities.

• Item Type: MPRA Paper
• Institution: School of Economic and Business Sciences, University of the Witwatersrand
• Language: English
• Keywords: Capabilities; Coordination Costs; Division of Labor; Economic Organization; Extent of the Market
• Subjects: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search ; Learning ; Information and Knowledge ; Communication ; Belief ; Unawareness; D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

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