Advancing Research on Competence, Governance, and Entrepreneurship

Posted: 24 Nov 2009

See all articles by Nicolai J. Foss

Nicolai J. Foss

Copenhagen Business School - Department of Strategy and Innovation

Volker Mahnke

Copenhagen Business School - Department of International Economics & Management

Date Written: 2000

Abstract

Discusses and contrasts the governance and competence perspectives of the firm.The competence perspective is decidedly production oriented, while the governance perspective is exchange oriented.Further, the competence perspective relies on the routine as the unit of analysis, whereas the governance perspective uses the transaction as the unit of analysis. Another distinction involves incentive conflicts: while such conflicts (such as opportunism) are relatively unimportant in the competence scheme, they are central to the governance perspective. A strategic theory of the firm must address the existence of the firm, the boundaries of the firm, internal organization, and competitive advantage; however, the governance perspective (at least in its present stage of development) fails to come to grips with a number of issues that are relevant to the strategy field.When regarded as complementary to the governance perspective, the competence perspective may work in concert with governance to address such issues. Both theories, then, are imperfect: although the governance perspective is relevant to business administration, it misrepresents many issues by reducing all problems of organization, management, and strategy to problems of aligning incentives; the competence perspective, on the other hand, remains true to traditional strategy issues but remains fairly undeveloped. This chapter also serves as an introduction to a collection of articles on the title theme, 'Competence, Governance, and Entrepreneurship.' (SAA)

Keywords: Competencies, Competency model, Organizational economics, Firm strategies, Strategic planning, Competitive advantages, Firm governance, Firm management, Firm theory, Incentives, Organizational structures

Suggested Citation

Foss, Nicolai J. and Mahnke, Volker, Advancing Research on Competence, Governance, and Entrepreneurship (2000). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1511475

Nicolai J. Foss (Contact Author)

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilen
Frederiksberg, 2000
Denmark

Volker Mahnke

Copenhagen Business School - Department of International Economics & Management ( email )

Frederiksberg, 2000
Denmark

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