Determinants of Organisational Size: Bhp and Vertical Integration 1885–1915

1997 ◽  
Vol 3 (1) ◽  
pp. 15-29 ◽  
Author(s):  
Douglas Blackmur
Keyword(s):  
Strategic Management ◽  
Vertical Integration ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Transactions Costs ◽  
Strategic Issues ◽  
Broken Hill ◽  
Company Limited ◽  
Critical Attention ◽  
Point Of Departure

AbstbactOne of the most important strategic issues for managers involves deciding the size of the organisation. Factors which influence this decision include economic, social and political change. The boundaries of the organisation are thus not fixed, and are in part contingent upon the particular characteristics of the environmental context. Theoretical progress in the discipline of strategic management, as far as it relates to matters of organisational size (and structure), requires that serious consideration be given to the analysis of the dynamics of vertical integration which is available in the New Institutional Economics literature. One of the most interesting strands in this literature is the Transactions Costs Economics developed by R.H. Coase and O.E. Williamson. This paper provides an overview of the Coase-Williamson theory of vertical integration. It then uses this theory as a point of departure in conducting an empirical discussion of decisions to integrate vertically taken by one of the world's largest mining enterprises, The Broken Hill Proprietary Company Limited, during the first 30 years of its existence. The paper seeks to demonstrate that theorising in strategic management is enriched if analytical (albeit critical) attention is paid to advances in the economics of organisation.

Determinants of Organisational Size: Bhp and Vertical Integration 1885–1915

1997 ◽  
Vol 3 (1) ◽  
pp. 15-29 ◽  
Author(s):  
Douglas Blackmur
Keyword(s):  
Strategic Management ◽  
Vertical Integration ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Transactions Costs ◽  
Strategic Issues ◽  
Broken Hill ◽  
Company Limited ◽  
Critical Attention ◽  
Point Of Departure

AbstbactOne of the most important strategic issues for managers involves deciding the size of the organisation. Factors which influence this decision include economic, social and political change. The boundaries of the organisation are thus not fixed, and are in part contingent upon the particular characteristics of the environmental context. Theoretical progress in the discipline of strategic management, as far as it relates to matters of organisational size (and structure), requires that serious consideration be given to the analysis of the dynamics of vertical integration which is available in the New Institutional Economics literature. One of the most interesting strands in this literature is the Transactions Costs Economics developed by R.H. Coase and O.E. Williamson. This paper provides an overview of the Coase-Williamson theory of vertical integration. It then uses this theory as a point of departure in conducting an empirical discussion of decisions to integrate vertically taken by one of the world's largest mining enterprises, The Broken Hill Proprietary Company Limited, during the first 30 years of its existence. The paper seeks to demonstrate that theorising in strategic management is enriched if analytical (albeit critical) attention is paid to advances in the economics of organisation.

scholarly journals Suchard and the Emergence of Traveling Salesmen in Switzerland, 1860–1920

2008 ◽  
Vol 82 (4) ◽  
pp. 735-759 ◽  
Author(s):  
Roman Rossfeld
Keyword(s):  
Vertical Integration ◽  
Market Research ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Social Image ◽  
Economic Significance ◽  
Production And Distribution ◽  
History Of ◽  
Product Sales ◽  
Critical Link

Based on theoretical findings of the new institutional economics, this examination of the history of the Swiss chocolate company Suchard (founded in 1826) and the Verband Reisender Kaufleute der Schweiz (Association of Swiss Commercial Travelers) describes the economic significance, social image, and everyday life of traveling salesmen between 1860 and 1920. By 1900, commercial travelers formed a critical link between the enterprise and the market, helping to drive the vertical integration of production and distribution. They enjoyed high standing within the company, and many were promoted to executive levels. Traveling salesmen were largely responsible for procuring information and expanding product sales in an era that preceded specialized market research and the domination of advertising companies.

scholarly journals Why transaction costs are so relevant in political governance? a new institutional survey

2016 ◽  
Vol 36 (2) ◽  
pp. 330-352 ◽  
Author(s):  
GONZALO CABALLERO ◽  
DAVID SOTO-OÑATE
Keyword(s):  
Transaction Costs ◽  
Economic Performance ◽  
Research Program ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Transactions Costs ◽  
Political Markets ◽  
Economic Markets ◽  
Douglass North ◽  
Political Governance

ABSTRACT The New Institutional Economics, led by four Nobel laureates (Ronald Coase, Douglass North, Oliver Williamson and Elinor Ostrom), has showed that institutions and organizations are a medium for reducing transaction costs and obtaining a higher efficiency in economic performance. This paper goes into the research program of the New Institutional Economics to explain the relevance of transaction costs in political exchange and organization and show that transactions costs are even higher in political markets than in economic markets. The paper reviews the main contributions on institutions, transaction costs and political governance, and provides some lessons on political transacting and governance. The survey includes the most detailed catalogue of political transaction costs that has ever been published.

Vertical Restrictions: Development of Theory, Antitrust Legislation and Enforcement

2010 ◽  
pp. 110-122 ◽  
Author(s):  
S. Avdasheva ◽  
N. Dzagurova
Keyword(s):  
Institutional Theory ◽  
Institutional Economics ◽  
Theory Of The Firm ◽  
New Institutional Economics ◽  
Hierarchical Organization ◽  
Vertical Restraints ◽  
New Institutional Theory ◽  
Antitrust Laws ◽  
Antitrust Legislation ◽  
Market Organization

The article examines the interpretation of vertical restraints in Chicago, post-Chicago and New Institutional Economics approaches, as well as the reflection of these approaches in the application of antitrust laws. The main difference between neoclassical and new institutional analysis of vertical restraints is that the former compares the results of their use with market organization outcomes, and assesses mainly horizontal effects, while the latter focuses on the analysis of vertical effects, comparing the results of vertical restraints application with hierarchical organization. Accordingly, the evaluation of vertical restraints impact on competition differs radically. The approach of the New Institutional Theory of the firm seems fruitful for Russian markets.

El Prestige: comparativa de los regímenes internacionales de responsabilidad civil

2019 ◽  
Vol 37 (3) ◽  
pp. 31
Author(s):  
Raquel Fernández González ◽  
Marcos Íñigo Pérez Pérez
Keyword(s):  
Institutional Economics ◽  
Geographical Area ◽  
New Institutional Economics ◽  
Rigorous Analysis ◽  
Judicial Process ◽  
Main Research ◽  
Civil Responsibility ◽  
The One ◽  
High Degree ◽  
The Prestige

The return of institutions to the main research agenda has highlighted the importance of rules in economic analysis. The New Institutional Economics has allowed a better understanding of the case studies that concern different areas of knowledge, also the one concerning the management of natural resources. In this article, the institutional analysis focuses on the maritime domain, where two large civil liability regimes for pollution coexist (OPA 90-IMO), each in a different geographical area (United States - Europe). Therefore, a comparative analysis is made between the two large regimes of civil responsibility assignment applying them to the Prestige catastrophe. In this way, the allocation and distribution of responsibilities in the investigation and subsequent judicial process of the Prestige is compared with an alternative scenario in which the applicable compensation instruments are governed by the provisions of the Oil Polution Act of 1990 (OPA 90), in order to establish a rigorous analysis on the effects that the different norms can have in the same scenario. In the comparative established in the case of the Prestige, where the responsibilities were solved very slowly in a judicial process with high transaction costs, the application of rules governed by the OPA 90 would not count with such a high degree of imperfection. This is so, since by applying the preponderance of the evidence existing in OPA 90 there would be no mitigation for the presumed culprits. On the other hand, the agents involved in the sinking would not be limited only to the owner, but also that operators or shipowners would be responsible as well. In addition, the amount of compensation would increase when counting in the damage count the personal damages, the taxes without perceiving and the ecological damage caused in a broad sense, damages not computable in the IMO.

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