A Capabilities perspective on the Evolution of Firms Boundaries: a comparative case example from the Portuguese moulds industry

• Type: Article in International Scientific Journal
• Date: 2004

Authors

Luís Manuel Mota de Castro (Author) FEP

Journal

Title: Journal of Management Studies

Vol. 41 No. 2

Pages: 295-316

ISSN: 0022-2380

Publisher: Wiley-Blackwell

Indexing

ISI Web of Science - 21 Citations

Scopus - 26 Citations

Other information

DOI: 10.1111/j.1467-6486.2004.00433.x

Abstract (EN): The issue of vertical firm boundaries continues to attract interest both for economics and management research. The transaction cost economics approach, emphasizing transaction-specific assets and opportunism in order to explain discrete `make-or-buy¿ decisions, dominates the literature. Nevertheless, alternative perspectives, developed under the guise of the capabilities, competence or knowledge-based theories of the firm, have gained attention recently. They focus on the evolutionary dynamics of boundaries in the context of the division of labour among firms in an industry and on what is to be divided and co-ordinated ¿ i.e. productive knowledge. The conceptual links between this line of research, which some refer to as neo-Marshallian, and the Industrial Networks approach are explored in this paper. The paper emphasizes both a vision of firms as sets of direct and indirect capabilities, developed and combined in different ways over time, and the connectedness between inter-firm relationships. The discussion is illustrated with the cases of two firms, which are contrasted in terms of the dynamic evolution of their boundaries. The analysis made supports the argument that firms¿ vertical boundaries reflect their relationships with specific counterparts and the way they address through time the division and integration of knowledge through the configuration of direct and indirect, counterpart specific, capabilities.

Language: Portuguese

Type (Professor's evaluation): Scientific