Scope Of Firms Research Articles

Specialization, Firms, and Markets: The Division of Labor within and between Law Firms

What is the role of firms and markets in mediating the division of labor? This paper uses confidential microdata from the Census of Services to examine law firms' boundaries. We first examine how the specialization of lawyers and firms increases as lawyers' returns to specializatio n increase. In fields where lawyers increasingly specialize with market size, the relationship between the share of lawyers who work in a field-specialized firm and market size indicates whether firms or markets more efficiently mediate relationships between lawyers in this and other fields. We then examine which pairs of specialists tend to work in the same versus different firms; this provides evidence on the scope of firms that are not field-specialized. We find that whether firms or markets mediate the division of labor varies across fields in a way that corresponds to differences in the value of cross -field referrals, consistent with Garicano and Santos' (2001) proposition that firms facilitate specialization by mediating exchanges of economic opportunities more efficiently than markets.

Vertical integration and disintegration of computer firms: a history-friendly model of the coevolution of the computer and semiconductor industries

In this article, we present a history-friendly model of the changing vertical scope of computer firms during the evolution of the computer and semiconductor industries. The model is history-friendly, in that it attempts at replicating some basic, stylized qualitative features of the evolution of vertical integration on the basis of the causal mechanisms and processes, which we believe can explain the history. These factors are identified in the coevolution of capabilities, the size of markets, and the structure of industries. In particular, the basic assumption is that the principal force behind the patterns of vertical integration and disintegration of computer firms was the differential development of capabilities for designing and producing semiconductors among firms. On this basis, the changing boundaries of firms are analyzed in the context of dynamic and uncertain technological and market environments, characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress. The model illustrates how the patterns of vertical integration and specialization in the computer industry change as a function of the evolving levels and distribution of firms' capabilities over time and how they depend on the coevolution of the upstream and downstream sectors. Specific conditions in each of these markets-the size of the external market, the magnitude of the technological discontinuities, the lock-in effects in demand-exert critical effects and feedbacks on market structure and on the vertical scope of firms as time goes by. Copyright 2008 , Oxford University Press.

The Structural and Performance Effects of Internetworking

Businesses worldwide are currently making substantial investment in the internet-enabling of their operations, and our research shows this investment is profoundly affecting the scope, structure and performance of firms. Deeply internetworked firms are more focused, less hierarchical and form external partnerships more readily. However, though clear operational benefits derive from such enabling, little IT-derived competitive advantage is noted from the transition. By differentiating operational from strategic internetworking we explain why this might be so. Moreover, this lack of any discernable competitive advantage does not make operational internetworking any less significant. Consequent to the internet's appearance, new forms of organisation and better methods of operational integration and control are emerging. Failure to invest in operational internetworking as quickly as peers might render tardy organisations uncompetitive in the face of more specialised, less hierarchical, more partnership-capable and more operationally-efficient competitors.

Integrating Human Resource and Technological Capabilities: The Influence of Global Business Strategies on Workplace Strategy Choices

Treating workplace strategies as the integration of human resource and technological capabilities, a typology of workplace strategy emphases is developed. The choice among these alternative workplace strategy emphases is treated as a function of market‐positioning priorities and the multinational scope of firms. Accordingly, a multinomial choice model is specified, which is tested against a sample of firms in the U.S. automotive supplier industry. The model obtains substantial empirical support. Among the findings is evidence consistent with the proposition that due to cross‐border, isomorphic constraints, multinational companies are less likely than national companies to pursue workplace strategies emphasizing human resource capabilities, choosing instead to favor the diffusion of workplace strategies emphasizing technological capabilities.

Examining the scope of multibusiness health care firms: implications for strategy and financial performance.

Use theory and data to examine the scope of corporate strategies for multibusiness health care firms, also known as organized or integrated health care delivery systems. Data are from the 2000 HIMSS Analytics Annual Survey of integrated health care delivery systems (IHDS), which provides complete information on businesses owned by IHDS. Scope defined as the breadth and type of businesses in which a firm chooses to compete is measured across seven separate business areas: (1) health plans, (2) ambulatory, (3) acute, (4) subacute, (5) home health, (6) other related nonpatient care businesses, and (7) external collaborations. Theories on strategy and organizational configurations along with measures of scope and a novel dataset were used to classify 796 firms into five mutually exclusive groups. The bases for classification were two competitive dimensions of scope: (1) breadth of businesses and (2) mix of existing core businesses versus new noncore businesses. Unit of analysis is the multibusiness health care firm. Sample consists of 796 firms, defined as nonprofit organizations that own two or more direct patient care businesses in two or more separate areas across the health care value chain. Firms were clustered into five mutually exclusive organizational configurations with unique scope characteristics revealing a new taxonomy of corporate strategies. Analysis of the scope variables revealed five strategic types (along with the number of firms and distinguishing features of each strategy) defined as follows: (1) Core Service Provider (340 firms with the smallest scope providing core set of patient care services), (2) Mission Based (52 firms with the next smallest scope offering core set of services to underserved populations), (3) Contractor (266 firms with medium scope and contracting with physician groups), (4) Health Plan Focus (83 firms with large scope and providing health plans), and (5) Entrepreneur (55 firms with the largest scope offering both a core set of services and investing in a variety of new noncore business opportunities including many for-profit ventures). Significant differences in financial performance among the strategies were found when controlling for payer reimbursement conditions. Specifically, in an unfavorable condition with high Medicaid and low commercial insurance, the Mission Based strategy performs significantly worse while the Entrepreneur strategy performs surprisingly well, in comparison with the other strategies. Findings suggest: (a) scope can be used to classify a large number of multibusiness health care firms into a taxonomy representing a small group of distinct corporate strategies, which are recognizable by senior management in the health care industry, (b) no single strategy dominates in performance across different payer profiles, instead there appears to be complementarities or fit between strategy and payer profiles that determines which firms perform well and which do not under different conditions, and (c) senior management of nonprofit health care firms are cross-subsidizing unprofitable patient care through ownership of nonpatient care businesses including for-profit ventures.

EXAMINING THE SCOPE OF MULTIBUSINESS HEALTH CARE FIRMS: IMPLICATIONS FOR STRATEGY AND PERFORMANCE.

This study applies theory and data to examine the organizational scope of multibusiness health care firms. Scope defined as the breadth and type of businesses in which a firm chooses to compete is measured across seven separate business areas: (1) health plans, (2) ambulatory, (3) acute, (4) subacute, (5) home health, (6) other related non-patient-care businesses, and (7) collaborations. Theories on strategy and organizational configurations along with measures of scope and a novel data set were used to classify 796 firms into five mutually exclusive groups. Each group had distinct scope characteristics across two competitive dimensions: (1) breadth and (2) mix of core versus non-core businesses. Analysis of the scope variables revealed five strategic types (along with the number of firms representing each strategy) defined as follows: (1) Core Service Provider (340 firms with the smallest scope providing core set of patient care services), (2) Mission Driven (52 firms with the next smallest scope offerin...

International Finance: A Course Overview

This paper describes the International Finance course at Harvard Business School for instructors considering adopting the associated material. The paper begins by arguing that the forces of globalization have fundamentally changed the scope and activities of firms thereby altering the practice of finance within these firms. As a consequence of an increasing reliance on tightly-integrated foreign operations, a parallel world of finance has been opened within every multinational firm and this world has, heretofore, been overlooked. The course materials are designed to address the many aspects of financial decision making within global firms prompted by these changes that are not addressed in traditional materials. The paper provides an overview of the structure of the course and its seven modules with particular emphasis on the three modules that constitute the core of the course. The paper also describes an analytical framework that has been developed through the creation of the course materials to guide critical financial decisions on financing, investment, risk management and incentive management within a multinational firm. This framework emphasizes the need to reconcile conflicting forces in order for multinational firms to gain competitive advantage from their internal capital markets. The paper concludes with a discussion of the course's pedagogical approach and detailed descriptions of all the course materials, including 19 case studies, corresponding teaching notes, several module notes and supplementary materials.

The impact of market liberalization on vertical scope: the case of Argentina

AbstractThis paper analyzes the impact of market liberalization on the vertical scope of firms. Using the case of Argentina, it is shown how the opening of the economy can improve contracting abilities and heighten competition, increasing the ability and incentive of firms to outsource. Survey findings support the main hypothesis as well as the specific importance of reforms relating to inflation, import costs, and heightened demand standards in increasing the use of outsourcing. A case study of the steel producer Siderar, highlights that while firms may reduce their presence in peripheral activities, they may also increase their presence in core areas so as to increase their value proposition. Copyright © 2002 John Wiley & Sons, Ltd.

A Composite Cost Function for Multiproduct Firms With An Application to Economies of Scope in Banking

The composite cost function the authors propose combines a quadratic output structure with a log-quadratic input price structure and is well suited for examining economies of scope, subadditivity, and other important properties of multiproduct firms. To compare the composite model with an appropriate set of alternative functional forms, they develop a parsimonious--but general--specification that nests the standard translog cost function, the generalized translog cost function, a separable quadratic cost function, and the composite cost function. An application to economies of scope in banking confirms the advantages of the composite model. Copyright 1992 by MIT Press.

RECENT ADVANCES IN OLIGOPOLY THEORY FROM A GAME THEORY PERSPECTIVE

Abstract. This paper surveys the contribution that recent developments in game theory have made to the understanding of oligopoly theory. It is argued that conventional models suffer from the problem that there are a number of solution concepts offered with little guidance as to which should be selected, and this is related to the static nature of the models employed. One important development in game theory has been the analysis of repeated games, and when applied to oligopoly theory this suggests that outcomes may be more cooperative than conventional theory suggests. Related to this is the requirement that firms employ credible threats to punish cheating from cooperative outcomes, and the paper examines the extent to which imperfect information may restrict the scope of firms to employ such punishments. One way in which firms may seek to make threats credible is through strategic investments, for example in production capacity, and the paper explores how competition over price or output is integrated with competition over instruments for strategic investment.

The Nature of Competition and the Scope of Firms

The Nature of Competition and the Scope of Firms

Professionalism, Professionalization, and Bias in the Commercial Human Relations Consulting Operation: A Survey Analysis

mine policies and practices of consulting firms that deal with human factor problems. The survey was designed in response to an apparent dearth of reported quantitative data concerning the nature, scope, and methods of such firms. While analyzing the responses, we encountered many unsolicited references to professional ethics and practices.1 Our object here is to document structural, operational, and attitudinal factors which we interpret as indicators of a propensity toward bias in the commercial consulting operation. In relation to this, we attempt to determine the extent to which the respondents' expressions of professionalism2 are related to a move toward professionalization3 of the consulting field4 which might be beneficial to the extent that it affords consultants the autonomy necessary to ensure against bias.

The Aircraft Research Association's Facilities

THE aircraft industry in the past has always had to rely on the wind tunnel facilities of the Ministry of Supply for such testing as was beyond the scope of the individual firms' tunnels, which are usually small. The new tunnel of the Aircraft Research Association Ltd., opened by the Duke of Edinburgh on May 4, is the result of the first attempt at co‐operative action between firms in the industry.