Speaker(s): Todd R. Zenger (Olin)
Title:
Author(s):
Abstract
Knowledge-based theorists have developed two primary arguments to explain the
existence of firms: one based on avoiding knowledge transfer and the other based
on facilitating knowledge transfer. These arguments are not only contradictory,
but also fail to predict when hierarchies supplant markets and when markets
prevail. This paper develops a knowledge-based theory of governance choice that
addresses these shortcomings by explaining how knowledge formation needs,
described by various solution landscapes, dictate governance selection.
Governance modes of market, authority-based hierarchy, and consensus-based
hierarchy are prominently featured in the theoretical analysis.