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The multiple boundaries of the firm

Araujo, L M and Dubois, A and Gadde, L E (2003) The multiple boundaries of the firm. Journal of Management Studies, 40 (5). pp. 1255-1277. ISSN 0022-2380

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Abstract

The notion of firm boundaries has received considerable attention in theories of the firm that address the problems of investment incentives and mitigation of hold-up problems. In this paper we attempt to develop a different approach to the problem of vertical firm boundaries, based on recent advances in the capabilities view of the firm. Our arguments rely on the pioneering insights of Penrose, Richardson and Loasby to elaborate a view of the boundaries determined by the interaction of the firm's direct and indirect capabilities with other actors. We develop the notion of indirect capabilities to highlight how firm boundaries respond to the distribution of capabilities in the economy as well as the modes of access to complementary and external capabilities. We conclude that the evolution of firm boundaries must be understood in the context of decisions on how the firm relates to other actors in its environment.

Item Type: Article
Journal or Publication Title: Journal of Management Studies
Subjects: H Social Sciences > HF Commerce
Departments: Lancaster University Management School > Marketing
ID Code: 43613
Deposited By: ep_importer_pure
Deposited On: 11 Jul 2011 19:02
Refereed?: Yes
Published?: Published
Last Modified: 09 Apr 2014 22:20
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/43613

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