Introduction and outline

Abstract

Economists have increasingly become interested in some of the same issues as organisation theorists. Since economic theories of organisation have not been integrated into organisation theory, it is convenient to distinguish between organisation theory, which is informed by sociology, and organisational economics. Probably the single most important influence on organisational economics is Ronald Coase’s seminal article, ‘The Nature of the Firm’ (1990 [1937]). Coase asks ‘Why is there any organisation?’ This is the first of series of rhetorical questions that have structured discussion in organisational economics. Other such questions are: ‘Does organisation matter?’ (Milgrom and Roberts, 1992, ch. 1); ‘What is a firm?’ (Chandler, 1992); ‘Why not organise everything in one large firm?’ (Williamson, 1985, p. 131); and ‘Why are there bosses?’ (Hess, 1983, ch. 7). These questions are concerned with the legitimacy of capitalist corporations. By and large, organisational economists are keen to endorse that legitimacy, but posing these rhetorical questions opens up the possibilities for wider debate. There is potential for dialogue concerning the legitimacy of the capitalist corporation, not only between mainstream organisational economics and organisation theory, but also radical organisation theory and Marxian political economy, all of which are given serious attention in this book.