ABSTRACT
The declared aim of this book is to bring together insights from the work of economists and management theorists on questions of the organisation of the firm. Each approach has much to offer the other. Economists interested in the organisation of international business have tended to focus on questions of the boundaries of the organisation, that is of its external structure. The analysis of transaction costs has been used, for example, to explicate the decision to export, to license or to manufacture overseas, and also the participation in international joint ventures and alliances (Buckley and Casson 1976, 1985; Buckley and Glaister 1994). However, a good deal of attention in the management literature is applied to the debate about internal organisation. Writers on management have promoted new structures and new approaches to organisation, using ideas from many sources. These include studies of Japanese business (Pascale and Athos 1981), of successful American businesses (Peters and Waterman 1982) and the analysis of quality management (Deming 1988). This chapter is an attempt to apply insights from the transaction costs approach to questions of internal organisation of the kind addressed in this management literature.
