Boundaries in the Study of Organization

Abstract

The concept of boundaries as relational processes has been central and ubiquitous in the social sciences, especially in areas such as the formation of individual, group or national identities, the creation of class, ethnic or gender inequalities, or the social construction of professions, knowledge and science itself. A key theme running through these literatures is how symbolic resources are used to create, perpetuate, or challenge institutionalized differences or inequalities by creating distinctions between ‘us’ and ‘them’, the legitimate or illegitimate, the acceptable or unacceptable, the in or out (Lamont & Molnar, 2002). A central focus of study has thus been how ‘symbolic boundaries’ (Lamont, 2001), particular classification systems enshrined in cognitive schemata have very real consequences in forming and sustaining corresponding social boundaries. In the management literature, however, there has been little serious and concerted study of the formation, properties and consequences of boundaries per se as complex, shifting, socially constructed entities. Organizational boundaries are often treated as socially and organizationally unproblematic, to be determined by considerations of economic efficiency, as, for example, in the case of transaction cost economics (Williamson, 1985), advancing a perspective originally proposed by Coase (1937). From a transaction cost perspective, for example, new technologies such as the internet can either enlarge or shrink firm boundaries through their effects on production costs that influence whether a productive task is outsourced or carried out internally (Afuah, 2003). The property rights approach (Grossman & Hart, 1986) has also been very influential in the theorizing of boundaries. In this approach, the boundaries of the firm are determined by the common ownership of assets that grants the owner bargaining power when issues of incomplete contracting, opportunism or hold-up problems emerge.