Publisher description for The mechanisms of governance / Oliver E. Williamson.
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This collection of groundbreaking essays brings together in one place the work of one our most respected economic theorists on a field that he in large part originated: the New Institutional Economics. With the New Institutional Economics, Oliver Williamson introduces a new way to look at how business organizations function. Rather than seeing the firm as a closed "black box" system, Williamson emphasizes the economic factors that are always at work within the firm, and the ways that decision makers respond to them. He shows that the key to the structure of firms is an understanding of the economics of transaction costs.
Transaction cost economics has had a pervasive influence on current economic thought about how and why institutions function as they do, and it has become a practical framework for research in organizations by representatives of a variety of disciplines. Through a transaction cost analysis, The Mechanisms of Governance shows how organizations tend to become increasingly complex, both because of the incomplete availability of vital information (bounded rationality) and because of the differing individual interests of members of firms (opportunism). The "good news" is that individuals within organizations become perceptive of resulting hazards they may and do encounter, and are adept at fashioning their organizations to cope creatively with difficult situations. This creativity accounts for diversity among organizations, in which governance structures are adapted to firm- or industry-specific hazards.
Library of Congress subject headings for this publication:
Industrial organization (Economic theory)