The Firm and the Authority Relation: Hierarchy vs. Organization
Austrian Economic Perspectives on Market Organization, G. Nell (ed.). New York: Palgrave Macmillan, Forthcoming
32 Pages Posted: 12 Oct 2013 Last revised: 25 Oct 2013
Date Written: October 1, 2013
The modern theory of economic organization asserts that the firm at its core consists of an “authority relation,” and that this is what distinguishes the firm from production processes coordinated by voluntary exchange in the market. This article expounds on and problematizes the uses of this concept in the literature, analyzes the implications, and discusses whether it is sufficient and/or necessary for formal organizing in the market.
Keywords: theory of the firm, authority
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