On the opportunism-independent theory of the firm

Previous developments in the opportunism-independent theory of the firm are either restricted to special cases or are derived from the capabilities or resource-based perspective. However, a more general opportunism-independent approach can be developed, based on the work of Demsetz and Coase, which is nevertheless contractual in nature. This depends on 'direction', that is, deriving economic value by permitting one set of actors to direct the activities of another, and of non-human factors of production. Direction helps to explain not only firm boundaries and organisation, but also the existence of firms, without appealing to opportunism or moral hazard. The paper also considers the extent to which it is meaningful to speak of 'contractual' theories in the absence of opportunism, and whether this analysis can be extended beyond the employment contract to encompass ownership of assets by the firm. © The Author 2005. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.

What to expect after the honeymoon:testing a life cycle theory of franchise relationships

This research examines the evolution of interorganizational relationships in a franchising context. Using U-curve theory, we develop three hypotheses and contrast them with traditional lifecycle theory. Three groups of constructs are affected by lifecycle: cooperation variables, dependence variables, and relationship variables. Four distinct stages emerge, with highest levels of variables in the honeymoon stage, lower levels in routine and crossroad stages, and increasing levels in the stabilization stage. Franchisors should strive for “stability on high levels” before operational realities influence the franchisees. Franchisees’ intermediate lifecycle phases are most critical for the system, since opportunistic behavior and switching are most likely.

Developing and leveraging human capital resource to promote service quality:testing a theory of performance

Grounded in Vroom’s motivational framework of performance, we examine the interactive influence of collective human capital (ability) and aggregated service orientation (motivation) on the cross-level relationship between high-performance work systems (HPWS) and individual-level service quality. Results of hierarchical linear modeling (HLM) revealed that HPWS related to collective human capital and aggregated service orientation, which in turn related to individual-level service quality. Furthermore, both HLM and ordinary least squares regression analyses revealed a cross-level interaction effect of collective human capital and aggregated service orientation such that high levels of collective human capital and aggregated service orientation influence individual-level service quality.

Building theory at the intersection of ecological sustainability and strategic management

This article builds theory at the intersection of ecological sustainability and strategic management literature—specifically, in relation to dynamic capabilities literature. By combining industrial organization economics–based, resource-based, and dynamic capability–based views, it is possible to develop a better understanding of the strategies that businesses may follow, depending on their managers’ assumptions about ecological sustainability. To develop innovative strategies for ecological sustainability, the dynamic capabilities framework needs to be extended. In particular, the sensing–seizing–maintaining competitiveness framework should operate not only within the boundaries of a business ecosystem but in relation to global biophysical ecosystems; in addition, two more dynamic capabilities should be added, namely, remapping and reaping. This framework can explicate core managerial beliefs about ecological sustainability. Finally, this approach offers opportunities for managers and academics to identify, categorize, and exploit business strategies for ecological sustainability.

Bernstein's theory of pedagogic discourse: linguistics, educational policy and practice in the UK English/literacy classroom

In “The English Patient: English Grammar and teaching in the Twentieth Century”, Hudson and Walmsley (2005) contens that the decline of grammar in schools was linked to a similar decline in English universities, where no serious research or teaching on English grammar took place. This article argues that such a decline was due not only to a lack of research, but also because it suited educational policies of the time. It applies Bernstein’s theory of pedagogic discourse (1990 & 1996) to the case study of the debate surrounding the introduction of a national curriculum in English in England in the late 1980s and the National Literacy Strategy in the 1990s, to demonstrate the links between academic theory and educational policy.

The theory of on-line learning: a statistical physics approach

In this paper we review recent theoretical approaches for analysing the dynamics of on-line learning in multilayer neural networks using methods adopted from statistical physics. The analysis is based on monitoring a set of macroscopic variables from which the generalisation error can be calculated. A closed set of dynamical equations for the macroscopic variables is derived analytically and solved numerically. The theoretical framework is then employed for defining optimal learning parameters and for analysing the incorporation of second order information into the learning process using natural gradient descent and matrix-momentum based methods. We will also briefly explain an extension of the original framework for analysing the case where training examples are sampled with repetition.

Centralised or decentralised? Strategic implications of resource allocation models

This paper examines the strategic implications of resource allocation models (RAMs). Four interrelated aspects of resource allocation are discussed: degree of centralisation, locus of strategic direction, cross-subsidy, and locus of control. The paper begins with a theoretical overview of these concepts, locating the study in the contexts of both strategic management literature and the university. The concepts are then examined empirically, drawing upon a longitudinal study of three UK universities, Warwick, London School of Economics and Political Science (LSE), and Oxford Brookes. Findings suggest that RAMs are historically and culturally situated within the context of each university and this is associated with different patterns of strategic direction and forms of strategic control. As such, the RAM in use may be less a matter of best practice than one of internal fit. The paper concludes with some implications for theory and practice by discussing the potential trajectories of each type of RAM.

An application of strategic group theory to the UK pharmaceuticals industry

Conducts a strategic group mapping exercise by analysing R&D investment, sales/marketing cost and leadership information pertaining to the pharmaceuticals industry. Explains that strategic group mapping assists companies in identifying their principal competitors, and hence supports strategic decision-making, and shows that, in the pharmaceutical industry, R&D spending, the cost of sales and marketing, i.e. detailing, and technological leadership are mobility barriers to companies moving between sectors. Illustrates, in bubble-chart format, strategic groups in the pharmaceutical industry, plotting detailing-costs against the scale of activity in therapeutic areas. Places companies into 12 groups, and profiles the strategy and market-position similarities of the companies in each group. Concludes with three questions for companies to ask when evaluating their own, and their competitors, strategies and returns, and suggests that strategy mapping can be carried out in other industries, provided mobility barriers are identified.

Effective leadership in salient groups:revisiting leader-member exchange theory from the perspective of the social identity theory of leadership

Two studies compared leader-member exchange (LMX) theory and the social identity theory of leadership. Study 1 surveyed 439 employees of organizations in Wales, measuring work group salience, leader-member relations, and perceived leadership effectiveness. Study 2 surveyed 128 members of organizations in India, measuring identification not salience and also individualism/collectivism. Both studies provided good support for social identity predictions. Depersonalized leader-member relations were associated with greater leadership effectiveness among high-than low-salient groups (Study 1) and among high than low identifiers (Study 2). Personalized leadership effectiveness was less affected by salience (Study 1) and unaffected by identification (Study 2). Low-salience groups preferred personalized leadership more than did high-salience groups (Study 1). Low identifiers showed no preference but high identifiers preferred depersonalized leadership (Study 2). In Study 2, collectivists did not prefer depersonalized as opposed to personalized leadership, whereas individualists did, probably because collectivists focus more on the relational self.

Opportunism, hold-up and the (contractual) theory of the firm

This paper considers the role of opportunism in three contractual theories of the firm: rent-seeking theory, property rights theory, and agency theory. In each case I examine whether it is possible to have a functioning contractual theory of the firm without recourse to opportunism. Without opportunism firms may still exist as a result of issues arising from (incomplete) contracting. Far from posing a problem for the theory of the firm, questioning the role of opportunism and the ubiquity of the hold-up problem helps us understand more about the purpose and functions of contracts which go beyond mere incentive alignment.

The classical theory of field evaporation

The field evaporation literature has been carefully analysed and is shown to contain various confusions. After redefining consistent terminology, this thesis investigates the mechanisms of field evaporation, in particular, the relevance of the theoretical mechanisms by analysing the available experimental data. A new formalism `extended image-hump formalism' is developed and is used to devise several tests of whether the image-hump mechanism is operating. The general conclusion is that in most cases the Mueller mechanism is not operating and escape takes place via Gomer-type mechanisms.

The role of context and timeframe in moderating relationships within the theory of planned behaviour

This study examined the moderating effect of context and timeframe on the predictive ability of Theory of Planned Behaviour (TPB) constructs. Three hundred and eighty-three students completed TPB measures either in a campus bar or a library and were randomly allocated to one of three timeframe conditions: tonight, tomorrow or next week. There was a threeway interaction such that the subjective norms of participants in a bar were more predictive of their intentions to binge drink that night, whereas thesubjective norms of participants in a library were less predictive of intentions to binge drink that night. This research provides empirical evidence that ignoring context may result in underestimation of the importance of normative factors in binge drinking. It also suggests that other research utilising the TPB needs to take greater account of the impact of context of data collection, which has been neglected to date.