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on Economics of Strategic Management |
| By: | Kirsten Foss; Nicolai J. Foss; Peter G. Klein |
| Abstract: | Recent work links entrepreneurship to the economic theory of firm using the Knightian concept of entrepreneurship as judgment. When judgment is complementary to other assets, and these assets or their services are traded in well-functioning markets, it makes sense for entrepreneurs to hire labor and own assets. The entrepreneur’s role, then, is to arrange or organize the human and capital assets under his control. We extend this Knightian concept of the firm by developing a theory of delegation under Knightian uncertainty. What we call original judgment belongs exclusively to owners, but owners may delegate a wide range of decision rights to subordinates, who exercise derived judgment. We call these employees “proxy-entrepreneurs,” and ask how the firm’s organizational structure — its formal and informal systems of rewards and punishments, rules for settling disputes and renegotiating agreements, means of evaluating performance, and so on — can be designed to encourage forms of proxy-entrepreneurship that increase firm value while discouraging actions that destroy value. Building on key ideas from the entrepreneurship literature, Austrian economics, and the economic theory of the firm we develop a framework for analyzing the tradeoff between productive and destructive proxy-entrepreneurship. We link this analysis to the employment relation and ownership structure, providing new insights into these and related issues in the economic theory of the firm. |
| Keywords: | Judgment; entrepreneur; delegation; employment relation; ownership |
| JEL: | B53 D23 L2 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:06-09&r=cse |
| By: | Nicolai J. Foss |
| Abstract: | The “knowledge governance approach” is characterized as a distinctive, emerging approach that cuts across the fields of knowledge management, organisation studies, strategy, and human resource management. Knowledge governance is taken up with how the deployment of governance mechanisms influences knowledge processes, such as sharing, retaining and creating knowledge. It insists on clear micro (behavioural) foundations, adopts an economizing perspective, and examines the links between knowledge-based units of analysis with diverse characteristics and governance mechanisms with diverse capabilities of handling these transactions. Research issues that the knowledge governance approach illuminates are sketched. |
| Keywords: | Governance; knowledge management; organizational economics |
| JEL: | L1 L2 M1 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:06-10&r=cse |
| By: | Andreas Pyka (University of Augsburg, Department of Economics); Nigel Gilbert (School of Human Sciences, University of Surrey, Guildford, Surrey, GU2 7XH, United Kingdom); Petra Ahrweiler (Research Center Media and Politics, Institute for Political Science, University of Hamburg, Germany) |
| Abstract: | An agent-based simulation model representing a theory of the dynamic processes involved in innovation in modern knowledge-based industries is described. The agent-based approach al-lows the representation of heterogeneous agents that have individual and varying stocks of knowledge. The simulation is able to model uncertainty, historical change, effect of failure on the agent population, and agent learning from experience, from individual research and from partners and collaborators. The aim of the simulation exercises is to show that the artificial innovation networks show certain characteristics they share with innovation networks in knowledge intensive industries and which are difficult to be integrated in traditional models of industrial economics. |
| Keywords: | innovation networks, agent-based modelling, scale free networks |
| JEL: | O31 O32 L22 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:0287&r=cse |
| By: | Daron Acemoglu; Philippe Aghion; Claire Lelarge; John Van Reenen; Fabrizio Zilibotti |
| Abstract: | This paper develops a framework to analyze the relationship between the diffusion of newtechnologies and the decentralization decisions of firms. Centralized control relies on theinformation of the principal, which we equate with publicly available information.Decentralized control, on the other hand, delegates authority to a manager with superiorinformation. However, the manager can use her informational advantage to make choices thatare not in the best interest of the principal. As the available public information about thespecific technology increases, the trade-off shifts in favour of centralization. We show thatfirms closer to the technological frontier, firms in more heterogeneous environments andyounger firms are more likely to choose decentralization. Using three datasets of French andBritish firms in the 1990s, we report robust correlations consistent with these predictions. |
| Keywords: | Decentralization, heterogeneity, learning, the theory of the firm |
| JEL: | O31 O32 O33 F23 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0722&r=cse |
| By: | Jiang, Juan; Harayama, Yuko; Abe, Shiro |
| Abstract: | This paper focuses on Tohoku University in Sendai in the nonmetropolitan area of Japan. Both a long historical and comparative perspective and a spacial perspective are essential to discuss the relevance of university-local industry linkages to local regional economic development. The conjunction of these linkages and economic development has been affected by two evolutionary processes: institutional configurations and territorial dynamics in the national innovation system. In addition, university-local industry linkages have been complicated by top-down regionalization and bottom-up regionalism. |
| Keywords: | Tertiary Education,ICT Policy and Strategies,Agricultural Knowledge & Information Systems,Technology Industry,Rural Development Knowledge & Information Systems |
| Date: | 2006–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3991&r=cse |