A Neo-Weberian Theory of the Firm

Organization Studies, Vol. 26, No. 4, pp. 547-567

39 Pages Posted: 10 Feb 2008

See all articles by Pursey P.M.A.R. Heugens

Pursey P.M.A.R. Heugens

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Abstract

The field of organization studies harbors two types of theories of the firm: why and how theories. The former seek to explain why firms exist despite the availability of institutional alternatives, whereas the latter explore how firms meaningfully connect the actions of many interdependently operating individuals to collective outcomes. Since both approaches are complements rather than substitutes, the field would benefit from the development of a parsimonious theory that integrates why and how perspectives. It is argued that Max Weber's writings on bureaucracy, and especially his focus on the organization as a collective actor governed by rational-legal decision rules, provide a meaningful conceptual background structure for such a theory. Specifically, through a rational reconstruction of certain elements of the Weberian legacy, a neo-Weberian theory of the firm is constructed here that simultaneously provides reasons for the existence of the firm and explores the nature of cooperation within the firm itself.

Keywords: theory of the firm, transaction cost theory, transaction cost economics, bureaucracy, Weber, cognition, cognitive efficiency, decision rules, organization studies, markets and hierarchies, social institutions of capitalism, organizational forms, markets, hierarchies, Austrian economics

Suggested Citation

Heugens, Pursey P.M.A.R., A Neo-Weberian Theory of the Firm. Available at SSRN: https://ssrn.com/abstract=1091432

Pursey P.M.A.R. Heugens (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
0031 10 408 2365 (Phone)
0031 10 408 9012 (Fax)

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